There has been a marked pick up in the number of cash ISA subscriptions in 2022/2023, recent data from HM Revenue and Customs has revealed.
The data showed that subscriptions to cash Isas increased by 722,000 when compared to 2021/2022.
Quilter tax and financial planning expert, Rachael Griffin, attributed this to the lure of higher interest rates.
A similar increase was seen for subscriptions to adult Isa accounts with 12.5mn subscribed to in 2022/2023.
The data showed this was an increase from the 11.8mn subscriptions that were recorded in 2021/2022.
However, in contrast, subscriptions to stocks and shares Isa dropped by 126,000 over the same period.
Griffin predicted that more people will be drawn to Isas in the future as, given the Bank of England has now started cutting interest rates, “we are seeing a significant shift in the savings and investment landscape”.
She added: “For years, savers have enjoyed the benefits of higher interest rates, but we are now seeing a turning point which requires a reassessment of savings strategies.
“As interest rates continue to fall, the challenge for savers is to find new ways to make their money work harder.”
Fidelity International associate director, Ed Monk, said: “Today’s figures from HMRC show that cash was king in the 2022/23 tax year, with cash Isas rebounding strongly since their pandemic lows.
“HMRC’s data highlights the significant bias that UK savers show towards cash rather than investments.”
Monk also pointed out that the figures revealed a gender disparity as, despite holding 51.8 per cent of all Isas, females hold only 42.6 per cent of stocks and shares Isas.
Meanwhile, in the 2021/22 tax year, 1.9mn men subscribed to a stocks and shares Isa, compared to only 1.4mn women.
“This stark gender gap in investing means women risk missing out on the potential growth opportunities that come from investing in the stock market,” he said.
“It’s crucial that the industry works to ensure women feel empowered and engaged to invest, seeing it as a viable option for them.”
tom.dunstan@ft.com
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