Cash ISA Savings Fall By A Third
The amount of money being saved into Cash ISA Savings has dropped by a third, according to HMRC.
Official figures show that during the tax year of 2016 to 2017, the amount of money invested into cash ISA’s fell by just over £19.5 billion to £39.2 billion.
There was also a fall in the number of new cash ISA accounts being opened, with just over 1.6 million fewer accounts being taken out in the last financial tax year as the number fell to just over 8.5 million in total.
Cash ISA Savings Fall
While the amount of money being saved into cash ISA’s has declined, contributions into stock and shares ISA’s increased to £22.3 billion in 2016 to 2017 from £21.1 billion invested the previous year.
This was translated into the number of stock and shares ISA’s being active, which rose from around 2.5 million to just over 2.6 million during the same period.
Richard Stone, chief executive of The Share Centre, said:
“While the data from HMRC shows a substantial fall in new ISA subscriptions, it is interesting to note that the decline is wholly down to a significant drop in amounts saved into cash ISA accounts.
“This perhaps reflects a growing appreciation among regular savers and investors of the impact of inflation on cash savings at a time of low-interest rates.”
Personal Savings Allowance
The decline in cash ISAs has been put down to low-interest rates and the introduction of the personal savings allowance.
The allowance means basic-rate taxpayers can earn up to £1,000 in tax-free savings (£500 for higher-rate taxpayers).
The interest to be earned from bank savings is currently on par with cash ISAs – whose best rates are currently around 1%.
Contact our Wilmslow Financial Advisor, Altrincham Financial Advisor, Warrington Financial Advisor, Liverpool Financial Adviser, West Kirby Financial Advisor or Manchester Financial Adviser team today about to discuss your savings strategy.