Savers are clearly not convinced that the Isa products currently on the market are a good place for their money, according to the wealth manager MoneyFarm.
According to research carried out by digital wealth management company MoneyFarm, fewer savers have been willing to open an individual savings account of any form as they are perceived to be offering poor returns but with high fees.
Data released by Revenue & Customs has shown that slightly fewer than 13m Isas were opened in 2014 to 2015, a reduction on the 13.5m accounts opened in 2013 to 2014.
Over the past five years the number of Isas opened has fallen by 14 per cent, with the popularity of the accounts reaching its apex in 2010/2011, when 15.2m Isas were opened.
The drop in the popularity of Isas comes in spite of the government’s decision to further increase the amount savers can put into a cash or stocks and shares Isa to £15,240 for the 2015/16 tax year.
According to the chairman of MoneyFarm, the data shows this part of the savings and investment market is long overdue improvements in product innovation and service levels.
Paolo Galvani, chairman and co-founder of MoneyFarm, said: “Savers are clearly not convinced that the Isa products currently on the market are a good place for their money.”
Sam Slator, head of communications at Chelsea Investment Intelligence, said: “From a company perspective we have seen little fluctuation in the number of people looking to open stocks and shares Isas, which would lead me to believe that cash Isas have become increasingly unpopular.
“The lack of interest in cash Isas is surely the result of low interest rates, with people unwilling to continue investing in accounts that are providing them with very little return.”