Aviva comment: ISA savers continue to love cash despite historically low base rates
Over the past six years, ISA savers have consistently put more than two thirds of their money in cash compared to stocks and shares. The latest figures show the split at 73% cash and 27% stocks and shares.
This insight comes 24 hours after Citizens Advice revealed that retirees also share a love of cash. Citizens Advice reported that three in ten retirees who are taking advantage of the pension freedoms are placing their withdrawn money in a bank account2.
Love of cash ISAs strongest amongst low earners, women and the young
The HMRC data shows that the love of low-risk cash ISAs is greatest amongst low earners, women and the young.
- Those earning less than ?30,000 are reported to place 83% of their ISA money in cash, compared to those earning over ?100,000 who place just 32% of their money in cash.
- Women place 80% of their ISA money in cash, compared to men who place 72%.
- Those aged under 35 place 92% of their ISA money in cash, compared to those aged 55+ placing just 72%.
Commenting on the data, Alistair McQueen, Savings and Retirement Manager at Aviva, said:
“ISA savers appear to disregard the old adage that ‘you have to speculate to accumulate’.
“While the Bank of England base rate has hit a historic low, ISA savers continue to demonstrate a love of low-risk cash. They have continued to place more than two-thirds of their money in cash. This is particularly the case amongst low earners, women and the young.
“At times of economic uncertainty, an aversion to risk may be understandable, but could savers be losing out? We will watch with interest to see how saving habits develop as the health of the economy and the level of the base rate evolves.”