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Stocks & Shares ISAs take a hit as Cash ISAs rebound

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert 01603 476210 Email Rachel
27/02/2023

Stocks & Shares ISAs take a hit as Cash ISAs rebound

Savers looking to utilise their ISA allowance before the 2022/2023 tax-year ends in April may well be considering a stocks and shares ISA as an alternative to a cash ISA. The latest analysis by Moneyfactscompare.co.uk reveals how stocks & shares ISAs have performed over the past 12 months compared to the average cash ISA rate.

Stocks & Shares ISAs take a hit as Cash ISAs rebound

Savers looking to utilise their ISA allowance before the 2022/2023 tax-year ends in April may well be considering a stocks and shares ISA as an alternative to a cash ISA. The latest analysis by Moneyfactscompare.co.uk reveals how stocks & shares ISAs have performed over the past 12 months compared to the average cash ISA rate.

  • The average stocks & shares ISA (individual savings account) fund experienced a loss of 3.27% between February 2022 and February 2023. This year’s average performance is much more subdued than the 6.92% growth seen between February 2021 and February 2022.
  • In contrast, the Moneyfacts average cash ISA rate returned 1.71% between February 2022 and February 2023. This compares to 0.51% between February 2021 and February 2022.
  • The average stocks & shares ISA (individual savings account) fund experienced a loss of 3.27% between February 2022 and February 2023. This year’s average performance is much more subdued than the 6.92% growth seen between February 2021 and February 2022.
  • In contrast, the Moneyfacts average cash ISA rate returned 1.71% between February 2022 and February 2023. This compares to 0.51% between February 2021 and February 2022.

Average stocks & shares ISA performance

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 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 and shares ISA data based on Lipper IM Primary funds. Source: Moneyfacts.co.uk / Lipper IM

 

Average stocks & shares ISA performance

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 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 and shares ISA data based on Lipper IM Primary funds. Source: Moneyfacts.co.uk / Lipper IM

 

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

“Stocks and shares ISAs suffered an overall loss over the past 12 months, with most primary fund sectors returning a loss. This should not be much of a shock considering the significant volatility felt across the markets over the past year, but it does emphasise the importance of keeping track of investments and ongoing fund performance. Cash ISAs have rebounded in comparison, thanks to competition and consecutive base rate rises.

“Cash ISAs are traditionally a more popular choice among consumers, but some investors may well be reconsidering their attitude to risk in hopes of growing their pot over the longer-term. Indeed, HMRC data showed a rise in the number subscribed to stocks and shares ISAs between 2020 and 2021, but Cash ISAs held the majority share. Over more recent years, there have even been ISAs created to encourage consumers to save for a home or retirement, such as with a Lifetime ISA. The right ISA for any saver will come down to their individual needs and those considering stocks and shares must keep in mind that past performance is never guaranteed to be reflected in future returns, so it’s vital investors are comfortable with their level of risk.

“Savers would be wise to compare the latest Cash ISA rates if they want to take advantage of their current ISA allowance as enticing deals are already entering the top rate tables. Those looking to move their older ISAs must be sure to transfer these to another ISA so they can retain their tax-free wrapper and keep in mind not every deal will offer this option. It is also worth considering the Personal Savings Allowance (PSA) when comparing savings accounts against ISAs. Whether someone is savvy with investing in funds or just a beginner, it is always wise to seek advice and regularly review any risk profile.”

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

“Stocks and shares ISAs suffered an overall loss over the past 12 months, with most primary fund sectors returning a loss. This should not be much of a shock considering the significant volatility felt across the markets over the past year, but it does emphasise the importance of keeping track of investments and ongoing fund performance. Cash ISAs have rebounded in comparison, thanks to competition and consecutive base rate rises.

“Cash ISAs are traditionally a more popular choice among consumers, but some investors may well be reconsidering their attitude to risk in hopes of growing their pot over the longer-term. Indeed, HMRC data showed a rise in the number subscribed to stocks and shares ISAs between 2020 and 2021, but Cash ISAs held the majority share. Over more recent years, there have even been ISAs created to encourage consumers to save for a home or retirement, such as with a Lifetime ISA. The right ISA for any saver will come down to their individual needs and those considering stocks and shares must keep in mind that past performance is never guaranteed to be reflected in future returns, so it’s vital investors are comfortable with their level of risk.

“Savers would be wise to compare the latest Cash ISA rates if they want to take advantage of their current ISA allowance as enticing deals are already entering the top rate tables. Those looking to move their older ISAs must be sure to transfer these to another ISA so they can retain their tax-free wrapper and keep in mind not every deal will offer this option. It is also worth considering the Personal Savings Allowance (PSA) when comparing savings accounts against ISAs. Whether someone is savvy with investing in funds or just a beginner, it is always wise to seek advice and regularly review any risk profile.”

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