With interest rates so low, it’s no surprise to read that the amount of cash being put into ISAs has fallen dramatically in the last year. In 2015-2016, £58.7bn was paid into cash ISA accounts. In the most recent financial year, that fell by almost a third to £39.2bn.
So what’s the reasoning behind the drop in cash ISA investments? James de Sausmarez, director and head of investment trusts at Janus Henderson Investors, argues that because Brits are ‘a conservative bunch’, we tend to fall back onto cash savings as being the ‘safest’ way of to look after our money. But here’s where we are going wrong; cash savings often aren’t the best option. Perhaps, thanks to a combination of low interest rates and the introduction of the personal savings allowance which allows people to earn up to £1,000 in savings income before tax, we have finally come to terms with that fact.
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