Cash catches advisers' eyes

In total 22 per cent of advisers expected to increase their clients’ exposure to cash, the latest survey from January found.

This is the highest recorded since the survey began in February 2016, when 18 per cent of advisers responded in the same way.

NS&I’s survey also found that for the fifth quarter in a row security was the most important priority cited by advisers on behalf of their clients.

Andrew Pike, head of intermediary relationships at NS&I, said: “Cash is back – or perhaps had never gone away.

“The rise in the proportion of advisers saying that they expect to increase their clients’ cash holdings in the next six months shows that cash remains an important and robust element of any balanced investment portfolio.

“The latest NS&I survey also shows that most advisers still view cash Isas as an attractive investment, despite the Personal Savings Allowance being introduced.”

In the 2015 to 2016 tax year, 80 per cent of the 12.5 million Isa savers subscribed to cash accounts, while just 20 per cent opened stocks and shares Isas, which is the lowest proportion seen since 2007 to 2008.

Advisers were split on whether the Personal Savings Allowance had permanently diminished the attractiveness of cash Isas for their clients.

While 45 per cent thought cash Isas had lost their lustre, citing the fact people can now earn more interest tax-free in non-Isa accounts, 55 per cent thought cash Isas remained attractive because of their familiarity and simplicity.

This is despite analysis from Schroders finding that the FTSE All-Share had outperformed average cash savings rates by 38 per cent since the birth of Isas in April 1999.

NS&I’s Financial Advice Barometer is conducted by sending emails to around 4,000 financial advisers each quarter.

For the January 2017 survey, 905 people opened the email and 93 people responded to the survey.

damian.fantato@ft.com