New figures reveal that that our love affair with ISAs continues, despite low interest rates, which show no sign of increasing anytime soon.
The figures, published by HMRC, show that:
- The number of ISAs taken out in the 2015/16 tax year fell slightly, to 12.7 million, down from 13 million in the year before
- However, the average amount saved or invested into ISAs rose by 5% to £6,338; only 9% of people subscribed the maximum amount
- In total £80 billion was salted away into ISAs in the last tax-year
- The total amount held in ISAs is now thought to be close to £600 billion, making them by far the most popular savings and investment vehicle
Cash ISAs v Stocks & Shares ISAs
Cash ISAs continue to be the most popular option, despite woeful interest rates. Although there is evidence that this is changing, with the amount of new money invested in Stocks & Shares ISAs rising by £4 billion to £21.4 billion, while the amount put into Cash ISAs fell.
It is also worth noting that Cash ISAs may become even less popular in the future following the introduction of the Personal Savings Allowance which will allow most savers to receive their interest free from tax.
Interestingly, users of Stocks & Shares ISAs tend to have higher incomes, of between £30,000 and £50,000 per year, whilst Cash ISA savers tend to earn between £10,000 and £20,000. Furthermore, women are more likely to save in an ISA than men.
ISAs have undergone something of a makeover in recent years with the maximum annual contribution being increased to £20,000, equalisation of the amount which can go into a Cash and Stocks & Shares ISAs, as well as a series of new launches including the Help to Buy ISA and next year, the Lifetime ISA.
Do you ned help with your ISA?
Our best buy tables show you the most competitive rates on Cash ISAs, these can be found by clicking here.
If you would like advice on a Stocks & Shares ISA please get in touch with one of our advisers; Bev or Sarah on 0115 933 8433 or email firstname.lastname@example.org