According to Moneyfactscompare.co.uk, the average stocks and shares ISA experienced 11.22 per cent growth between February 2025 and February 2026. In contrast, the average cash ISA rate over the same period was 3.48 per cent.
However, a lack of confidence in investing remains a barrier to people opening stocks and shares ISAs – with many savers preferring the certainty of guaranteed cash savings rates.
Aviva states that 55 per cent of consumers have no investments and 39 per cent think it’s too risky to invest.
The Government wants to encourage greater retail investment. Chancellor Rachel Reeves announced in the Budget that from April 2027, £8,000 of the £20,000 tax-free ISA allowance must be invested in stocks and shares, capping the annual cash ISA allowance at £12,000, except for those who are over 65.
Rachel Springall, from Moneyfactscompare.co.uk, said its findings “should be a wake-up call for those who fear investing, as cash returns have diminished”.
She added: “It is important to not rely on returns over the shorter-term when making longer-term investment decisions.
“It is going to take a lot more than positive returns to encourage an investing culture in the UK. Not every saver will feel confident enough to invest, but if they get good guidance, they can start small and slowly gain more knowledge to encourage them to increase their deposits.
“Cash is considered a safe choice, but investing shows the gains that could be made over the longer-term.
“Granted, past performance is not guaranteed to be repeated, so short-term gains should not be a decision maker in isolation. The past year alone laid bare the importance of seeking advice before taking the plunge to invest, some sectors boom one year and perform badly the next but can bounce back.
“The Government has been very vocal about the desire for more investment in the UK, and by April, the Retail Investment Campaign is expected to be launched. The initiative is intended to raise awareness of the importance of investing to people’s future financial wellbeing and highlight the value of investing to the economy.” She said the UK All Companies fund returned 13.72 per cent, up from 13.26 per cent.