Share ISAs returned four times as much as cash in 2010
- But Virgin Money analysis shows nearly four times as many cash ISAs are opened
Investors remained risk averse in 2010, opening cash ISAs at nearly four times the rate of share ISAs, despite the past year showing share ISAs returned four times as much, analysis from Virgin Money shows.
HMRC figures show 11.9 million cash ISAs were opened in the 2009-2010 tax year compared with just over 3 million shares ISAs.
Investors who put £5,100 into cash ISAs during the 2009-2010 tax year would have seen returns of £145, while the same amount invested in a stocks and shares ISA over the same period would have recorded returns of £593 before charges.
On the average investment of £4,155 recorded by HMRC, the Virgin Index Tracking Trust ISA would have returned £483, compared to a £78 return on the average cash ISAs investment of £2,731.
The strong performance of the FTSE-All Share last year, from 1 January 2010 to 1 January 2011, saw an investment in the Virgin UK Index Tracking Trust grow by 11.62% before charges. Average top rates for cash ISAs were around 2.85%.
Share investors are right to be cautious given the volatile nature of the stockmarket. Figures suggest however that 'time' and not 'timing' is the key to long term capital growth.
Investing in the Virgin Index Tracking Trust on the 1 January 2007 to the 1 January 2011 would have seen a -3.91% loss. On the upside, investing on the 1 January 2003 to 1 January 2011 would have seen a 63.43% return and overall, to set the long term context, investing on 1 April 1995 to 1 January 2011 would show a 98.46% return illustrating the long term growth potential of share investment. (Note: Past performance should serve as no indication of future stock market performance.)
Grant Bather, spokesman at Virgin Money, said: "With cash ISAs outnumbering share ISA investment by four to one, it is clear savers have been put off the stock market as a result of the volatility seen over the past few years. Unfortunately investors don't have a crystal ball but it is important to consider the mix of cash and shares in your portfolio to ensure you are comfortable with the risk you are taking.
“Whether you go for cash or share ISAs or a mixture of the two it is important to make the most of your ISA allowance. Any savings or investments must be made by 5 April, the end of the tax year. Crucially, unused allowances don't roll-over, they are lost for good.”
- ENDS -
The performance data is calculated in the local currency of the fund / index / average (as applicable), on an offer to offer / nav to nav basis, with gross dividends re-invested on ex-dividend date.
Past performance is not necessarily a guide to future performance; unit prices may fall as well as rise.
For further information
Grant Bather, Virgin Money Press Office
Grant.email@example.com 0207 111 1012
Tel: 0207 638 9571
About Virgin Money
- Virgin Money is Virgin’s financial services arm and was established in 1995 as a joint venture between the Virgin Group and Norwich Union.
- In 1997, Virgin Direct Personal Financial Services Limited launched The Virgin One Account, a joint venture with The Royal Bank of Scotland that offered the UK’s first current account mortgage direct to the retail market. In 2001, RBS bought out the Virgin Group’s stake in the joint venture.
- In April 2004 the Virgin Group took 100% ownership of Virgin Money.
- Virgin Money currently has over 2.5 million customers and offers Payment Cards (credit cards & Prepaid Cards), Savings and Investment products (Stakeholder Pensions, Children’s Pensions, Employers Pensions, FTSE Tracker ISA, Bond & Gilt ISA, Climate Change ISA, Cash ISA, and Unit Trusts), General Insurance products (Motor, Home, Travel, and Pet) and Life Assurance products to the UK market. To apply go to http://uk.virginmoney.com/virgin.
- Virgin Money’s brand ambition is to make “everyone better off” – this philosophy underpins our approach to business by offering good value to customers, treating employees well, making a positive contribution to society and delivering a profit to shareholders.
- Virgin has signed a five-year deal to be the official sponsor of the London Marathon, the biggest annual fundraising event in the world. The inaugural Virgin London Marathon was on 25 April 2010. Virgin Money, the financial services division of the Virgin Group is leading the London Marathon sponsorship with the ambition to help runners raise £¼ billion over 5 years and will use its infrastructure, online capability and financial expertise to deliver that through Virgin Money Giving.