New HM Revenue & Customs (HMRC) data reveals that the nation’s cash ISAs are no longer growing as withdrawals are now matching new contributions.

Cash ISAs have traditionally been more popular than investments in stocks and shares ISAs. Recently, this has started to change, as indicated on the most recent HMRC data illustrated in the graph below.

 

According to the HMRC data, in the last tax year (2016/17), cash ISA contributions fell by a third, falling to around £39 billion (which is still a lot), but the total held in cash ISAs only increased by £1.26 billion in the same period.

If we account for the interest, even at the current low rates, that suggests a net outflow from the nation’s ISA savings.

But there are some good reasons why cash ISAs might be losing favour among savers:

If you hold money in cash ISAs, it may make sense to review whether you should continue to do so. You could find yourself earning more interest outside an ISA or gaining more tax benefits from a stocks and shares ISA.

We can help you review your plans and circumstances.
Call us to discuss your options on 020 8559 2111.

[highlight]The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances. The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Conduct Authority does not regulate tax advice.[/highlight]