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.”