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Cash ISA returns beat Stocks & Shares ISA growth

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert 01603 476210 Email Rachel
20/02/2024

Cash ISA returns beat Stocks & Shares ISA growth

Savers looking to utilise their ISA allowance before the 2023/2024 tax-year ends in April may well be considering a stocks & shares ISA as an alternative to a cash ISA. The latest analysis by Moneyfactscompare.co.uk reveals how stocks & shares ISAs performed over the past 12 months compared to the average cash ISA rate.

Cash ISA returns beat Stocks & Shares ISA growth

Savers looking to utilise their ISA allowance before the 2023/2024 tax-year ends in April may well be considering a stocks & shares ISA as an alternative to a cash ISA. The latest analysis by Moneyfactscompare.co.uk reveals how stocks & shares ISAs performed over the past 12 months compared to the average cash ISA rate.

  • The average stocks & shares ISA (individual savings account) fund experienced a growth of 2.80% between February 2023 and February 2024. This year’s average performance compares to a fall of 3.27% between February 2022 and February 2023.
  • In contrast, the Moneyfacts average cash ISA rate returned 3.73% between February 2023 and February 2024. This compares to 1.71% between February 2022 and February 2023.

 

  • The average stocks & shares ISA (individual savings account) fund experienced a growth of 2.80% between February 2023 and February 2024. This year’s average performance compares to a fall of 3.27% between February 2022 and February 2023.
  • In contrast, the Moneyfacts average cash ISA rate returned 3.73% between February 2023 and February 2024. This compares to 1.71% between February 2022 and February 2023.

 

Average stocks & shares ISA performance

1 Feb 2023 to 1 Feb 2024

% growth

Average stocks & shares ISA

2.80%

Best-performing stocks & shares ISA fund sector

34.14% (Technology & Telecoms)

Worst-performing stocks & shares ISA fund sector

-32.46% (China/Greater China)

1 Feb 2022 to 1 Feb 2023

% growth

Average stocks & shares ISA

-3.27%

Best-performing stocks & shares ISA fund sector

24.64% (Commodities and Natural Resources)

Worst-performing stocks & shares ISA fund sector

-32.81% (UK Index Linked Gilts)

1 Feb 2021 to 1 Feb 2022

% growth

Average stocks & shares ISA

6.92%

Best-performing stocks & shares ISA fund sector

27.69% (Commodities and Natural Resources)

Worst-performing stocks & shares ISA fund sector

-21.98% (China/Greater China)

Average cash ISA rate

Feb 2023 to Feb 2024

3.73%

Feb 2022 to Feb 2023

1.71%

Feb 2021 to Feb 2022

0.51%

Average cash ISA rate is the average of each 1st of month figure over the period shown, includes fixed and variable ISA rates. All stocks & shares ISA data based on Lipper IM Primary funds. Source: Moneyfactscompare.co.uk / Lipper IM

 

Average stocks & shares ISA performance

1 Feb 2023 to 1 Feb 2024

% growth

Average stocks & shares ISA

2.80%

Best-performing stocks & shares ISA fund sector

34.14% (Technology & Telecoms)

Worst-performing stocks & shares ISA fund sector

-32.46% (China/Greater China)

1 Feb 2022 to 1 Feb 2023

% growth

Average stocks & shares ISA

-3.27%

Best-performing stocks & shares ISA fund sector

24.64% (Commodities and Natural Resources)

Worst-performing stocks & shares ISA fund sector

-32.81% (UK Index Linked Gilts)

1 Feb 2021 to 1 Feb 2022

% growth

Average stocks & shares ISA

6.92%

Best-performing stocks & shares ISA fund sector

27.69% (Commodities and Natural Resources)

Worst-performing stocks & shares ISA fund sector

-21.98% (China/Greater China)

Average cash ISA rate

Feb 2023 to Feb 2024

3.73%

Feb 2022 to Feb 2023

1.71%

Feb 2021 to Feb 2022

0.51%

Average cash ISA rate is the average of each 1st of month figure over the period shown, includes fixed and variable ISA rates. All stocks & shares ISA data based on Lipper IM Primary funds. Source: Moneyfactscompare.co.uk / Lipper IM

 

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“Cash ISA returns have now beaten stocks & shares ISA growth for the past two consecutive years. The savings market thrived during 2023, thanks to rising variable and fixed rates, and cash ISA rates received a boost. Savings rates have come down over the past few months, but consumers can still find better returns than at this time last year, and ISAs remain an essential way for savers to protect their nest egg from tax. Those who are prepared to invest in the stock market may be pleased to see stocks & shares ISAs return growth over the past 12 months, off the back of falls felt the year before. Savers sitting on the fence as to whether it’s time to invest may now feel more confident in the stock market.

“Traditionally, stocks & shares ISAs would be chosen by investors who are prepared to invest for better returns over the longer-term on the basis that performance might fluctuate over shorter timescales but it is essential to regularly check the performance of their pot and seek advice if they need to review their risk profile. There are fund sectors which have performed well over the past 12 months including North America and Japan up by 14.22% and 10.18% respectively, but there are also those which fell significantly. Indeed, the worst-performing stocks & shares ISA fund sector over the past year (China/Greater China) fell by more than 30%. However, sectors that return growth one year can fail to perform another; indeed between 2022 and 2023, the Commodities and Natural Resources sector was the best performing (returning more than 24%), but over the past 12 months it fell by almost 13%.

“The most suitable ISA for any saver will depend on their own circumstances. Those considering stocks & shares must keep in mind that past performance is never guaranteed to be reflected in future returns, so it’s crucial investors are comfortable with their attitude to risk. The new ISA rules coming into effect from the new tax-year could make these more desirable for savers who wish to subscribe to more than one ISA of each type per year. Until then, it’s worthwhile for savers to consider both their current ISA allowance and their Personal Savings Allowance (PSA) when comparing accounts. Easy access cash ISAs are ideal for those who want quick access to their funds, whereas fixed are more suited to those who want a guaranteed return of interest.”

 

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“Cash ISA returns have now beaten stocks & shares ISA growth for the past two consecutive years. The savings market thrived during 2023, thanks to rising variable and fixed rates, and cash ISA rates received a boost. Savings rates have come down over the past few months, but consumers can still find better returns than at this time last year, and ISAs remain an essential way for savers to protect their nest egg from tax. Those who are prepared to invest in the stock market may be pleased to see stocks & shares ISAs return growth over the past 12 months, off the back of falls felt the year before. Savers sitting on the fence as to whether it’s time to invest may now feel more confident in the stock market.

“Traditionally, stocks & shares ISAs would be chosen by investors who are prepared to invest for better returns over the longer-term on the basis that performance might fluctuate over shorter timescales but it is essential to regularly check the performance of their pot and seek advice if they need to review their risk profile. There are fund sectors which have performed well over the past 12 months including North America and Japan up by 14.22% and 10.18% respectively, but there are also those which fell significantly. Indeed, the worst-performing stocks & shares ISA fund sector over the past year (China/Greater China) fell by more than 30%. However, sectors that return growth one year can fail to perform another; indeed between 2022 and 2023, the Commodities and Natural Resources sector was the best performing (returning more than 24%), but over the past 12 months it fell by almost 13%.

“The most suitable ISA for any saver will depend on their own circumstances. Those considering stocks & shares must keep in mind that past performance is never guaranteed to be reflected in future returns, so it’s crucial investors are comfortable with their attitude to risk. The new ISA rules coming into effect from the new tax-year could make these more desirable for savers who wish to subscribe to more than one ISA of each type per year. Until then, it’s worthwhile for savers to consider both their current ISA allowance and their Personal Savings Allowance (PSA) when comparing accounts. Easy access cash ISAs are ideal for those who want quick access to their funds, whereas fixed are more suited to those who want a guaranteed return of interest.”

 

Notes to editors

Pioneering financial comparison technology for over 35 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

We hope you find this press release insightful. We would appreciate a link back to Moneyfactscompare.co.uk if you decide to source this information.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

Notes to editors

Pioneering financial comparison technology for over 35 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

We hope you find this press release insightful. We would appreciate a link back to Moneyfactscompare.co.uk if you decide to source this information.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

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Rachel Springall Press Officer / Finance Expert
Caitlyn Eastell Apprentice Press & PR Assistant