ISA switching: The total amount invested in stocks & shares ISAs is now greater than that in cash ISAs.
Recent HMRC figures show the total amount invested in stocks & shares ISAs is now greater than that in cash ISAs, at £315bn and £270bn respectively, reflecting the fact that the stock market has produced better long-term returns than cash, and that investments in stocks and shares are held for longer.
Cash inflows also declined by almost £20bn; in the 2016/17 tax year, some £22.3bn was invested in 2.58 million stocks & shares ISAs (up from £21.1bn and 2.53 million in 2015/16), while the amount invested in cash ISAs fell by £19.5bn to £39.2bn, with 1.6 million fewer cash accounts opened.
According to Danny Cox, chartered financial planner at Hargreaves Lansdown, this suggests that “more people are now turning to the stock market with their long-term savings.”
Article source: Professional Adviser, Investment, 31st August 2017.