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Stocks and shares Isa funds ‘have grown at 13 times cash Isa rates on average’


The average stocks and shares Isa fund rate was more than 13 times the typical cash Isa rate over the past year, according to a financial information website.

Between February 2021 and February 2022, the typical cash Isa rate was just 0.51%, Moneyfacts.co.uk found.

This was the lowest the website has recorded for this 12-month February to February period since its records started in 2008.

The average stocks and shares Isa fund, meanwhile, returned 6.92% between February 2021 and February 2022 – more than 13 times the average cash Isa rate.

The past year’s average performance however was much more subdued than the 13.55% growth seen between March 2020 and March 2021, Moneyfacts said.



As always, past performance is never guaranteed to be reflected in future returns

Rachel Springall, Moneyfacts.co.uk

The average cash Isa rate between March 2020 and March 2021 was 0.63%.

The value of money invested in stocks and shares can go down as well as up, and investors could get back less than they paid in. Often, people are advised to leave money invested for at least five years, to help smooth out the ups and downs of the market over time.

Rachel Springall, a finance expert at Moneyfacts.co.uk, said: “The average stocks and shares Isa fund returned a growth of 6.92% over the past 12 months, which was more subdued than the 13.55% seen between March 2020 and 2021.

“However, as may well be obvious, this was a volatile period.”

She added: “The past 12 months have been impacted by a variety of influences and this reaffirms the necessity for investors to keep an eye on their investment but not to make drastic decisions to switch without getting advice.

“As always, past performance is never guaranteed to be reflected in future returns, and it’s vital investors are comfortable with their level of risk.

“As inflation continues to soar and the Bank of England raises interest rates, it will be interesting to see how savers will respond and where they place their cash.

“It’s clear to see how cash Isa are being eroded by rising inflation, but consumers may not feel confident enough to invest in the stock market quite yet.

“If consumers wish to use their 2021/22 Isa allowance or to start reviewing their plans for the next tax year with about six weeks to go, getting advice is wise regardless of whether someone is only just starting the investment path or has more experience.”

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