Stocks & Shares ISAs Overtake Cash ISAs

Stocks & Shares ISAs Overtake Cash ISAs

New figures have shown that the amount held by Cash ISAs has declined by £20 billion, with low rates of interest appearing to put the public off.

On a more positive note, the amount of money held in Stocks & Shares ISAs is now at £315 billion, compared to £270 billion held in Cash ISAs, according to HMRC data.

With typical Cash ISA rates at 1%, and the current rate of inflation being 2.6%, people are seeing the value of their money go down if left in a Cash ISA. In contrast, a Stocks & Shares ISA could provide higher returns, based on the performance of the fund you are invested in.

Historically, the stock market has produced better returns than cash. You only need to look at where the FTSE 100 was thirty years ago, and then look at where it is now, to see how the stock market can gain value and ride out fluctuations over the long term.

Around £22.3 billion was put to Stocks & Shares ISAs during the 2016/17 tax year, which is an increase from £21.1 billion in 2015/16. The number of people using Stocks & Shares ISAs increased from 2.53 million to 2.58 million.

You can learn more about Stocks & Shares ISAs here.

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Your capital is at risk. Investments can fluctuate in value and you may not get back the amount you invest. Past performance is not a guide to future performance. Tax rules can change at any time.

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