There is a famous saying which goes “fortune favours the brave.” I think this is perfectly applicable when it comes to Isa savings.
The amount invested in Isas is set to rise by an estimated £38.2bn by the end of this financial year according to a recent study by CoreData Research.
As you have probably guessed, the lion’s share of this figure - £33.8bn according to the report - is attributed to the amount that is predicted to be put into an cash Isa.
An extra £4.4bn, a handsome figure which appears measly in comparison, is set to be placed into stock and shares Isas.
Now is the perfect time for savers to take a brave step and place their money into a stocks and shares Isa.
The returns of cash Isas are disappointing because of record low base rates – with many predicting a rise in base rates will not come until spring 2016.
Interest rates could yet plunge further to 0.25 per cent if Nick Dixon, investment director at Aegon UK, is correct in his assessment of the BoE inflation report.
For those who feel apprehensive about taking the plunge, they can opt to invest a small percentage of their £15,000 tax free allowance into the Isa thanks to the Isa changes which were implemented in July last year.
Yes, market volatility makes investing into stocks and shares more risky than cash Isas but the potential returns are mouth-watering, as many shares pay a decent return through their regular dividends.
The key question is: how do you get this message across to a generation which prefers to sit on its earnings rather than allowing their money to work harder for them?
Perhaps the industry has a responsibility to educate the layman of this opportunity.
Or perhaps it is on the increasingly tech savvy lay-people themselves to go on the internet via their laptops, mobile phones or the latest smart gadgetry and research the options available to them.
With another increase in ISA allowance on the way for the next tax year, I hope many savers will opt to take the less conventional approach.
