Does a cash ISA still make sense?
The most recent ISA statistics from HMRC show that in April 2018 over £270m was invested in cash ISAs which represents around 44% of the total adult ISA funds.
Whether that is a sensible use of the tax advantages offered by ISAs is a moot point. The introduction of the personal savings allowance in 2016/17 of £1,000 for basic rate taxpayers or £500 for higher rate, means that most savings interest no longer attracts tax. Add to that the lowly cash ISA interest rates – NS&I pays only 0.9% – and if you still have a cash ISA, you may want to consider transferring it to the stocks and shares version.
A stocks and shares ISA is a medium to long term investment, which aims to increase the value of the money you invest for growth or income or both. The value of your investments and any income from them can fall as well as rise. You may not get back the amount you invested. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.