Sales of Individual Savings Accounts (ISAs) have climbed to their highest level in eight years, according to figures published by the Investment Management Association (IMA).

Investors paid some £3.5 billion into the tax-free accounts in the 2009/10 tax year, making it the strongest ISA season since 2001/02. The total funds now held in ISAs have also surpassed the £500 billion mark for the first time.

The findings indicate a reversal in a five-year trend which has seen people withdraw more money from their ISA than they actually paid into it.

Richard Saunders, the chief executive of the IMA, said: ‘Savings held in UK funds have topped £500bn for the first time, something that would have been unthinkable a generation ago. ISA sales for the last tax year are the highest since 2001/02, as was the year-end ISA season. The strong propensity to save seen in 2009 has continued this year.’

However, the traditional last-minute rush to deposit savings before the end of the tax year was more muted than usual, the IMA said. Just £152 million was invested during the last few days, the smallest total since ISAs were introduced in 1999.

It is believed that the timing of this year’s Easter holiday may have contributed to the lower than expected end of year sales figures.