Nest egg savers should crack stocks & shares ISAs
- Virgin Money research shows 53% are saving for a nest egg
- But 3.5 times more people open cash ISAs than stocks & shares ISAs
More than five times as many ISA savers are putting money away for a nest egg compared with those saving for a rainy day – but they are steering clear of stocks & shares ISAs, new research1 from Virgin Money shows.
Its research1 shows 53% of ISA investors are saving long-term for a nest egg compared with just 12% who are putting short-term cash away for a rainy day. But analysis of HMRC data2 shows almost 3.5 times as many cash ISAs are opened each year compared with stocks & shares ISAs.
Virgin Money is encouraging savers to consider the long-term benefits of stocks & shares ISAs – and their potential to provide inflation-beating returns – with investors in the Virgin Index Tracking Trust enjoying gains of 39.15% after charges between 31 December 2008 and 31 December 2011.
Gains over longer terms include 43.44% between 31 December 2001 and 31 December 2011 and an impressive 165.8% since the fund launched on 31 March 1995 to 31 December 2011.3
Scott Mowbray of Virgin Money, said: "Making the most of cash and the stocks & share elements from the ISA allowance could be the key to people achieving their savings goal. Savers clearly understand the benefits of generating tax-efficient returns by investing in ISAs, however, our research suggests that while many people want to save for the longer term, they are adopting a short-term strategy. Savers should consider whether their money is working as hard for them as it could be.
“Adopting a mix and match approach using both cash and stocks & shares ISA allowances, depending on what you are saving for and what you can afford, can help you get the balance right between rainy day money and saving for the future as our research suggests."
Virgin Money urges all savers – whether they choose cash or stocks & share ISAs or a mixture of the two – to make the most of their ISA allowance.
Any savings or investments must be made by the end of the current tax year on 5 April, and any allowances not used this year are lost for good.
|Virgin UK Index Tracking Trust performance over the last 5 years|
|31/12/06 to 31/12/07||31/12/07 to 31/12/08||31/12/08 to 31/12/09||31/12/09 to 31/12/10||31/12/10 to 31/12/11|
Source: Morningstar Workstation, 31.12.06 to 31.12.11, calculation based on figures in £’s, on a bid to bid basis, net of basic rate tax with income reinvested.
- Crowd-sourced research on Survey Monkey and Facebook among Virgin Money customers.
- HMRC data shows around 11.9 million cash ISAs are opened a year compared with just under 3.5 million shares’ ISAs.
- Remember, with stock market investments the value of your savings and the income you get from them can go down as well as up and you may not get back the full amount you invest. It's also worth remembering that past performance of a fund isn't a guide to how well it might do in the future.
|For further information|
Tel: 07834 844 427
Citigate Dewe Rogerson
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About Virgin Money
- Virgin Money agreed to acquire Northern Rock plc from Her Majesty’s Treasury on 17 November 2011. The deal completed on 1 January 2012. The acquisition included
- 75 Northern Rock branches
- One million customers
- c.£14bn mortgage book
- c.£16bn retail deposit book
- c.2,100 employees
- Combined with Virgin Money’s existing business of three million customers, the enlarged Group will have over four million customers.
- The combined business will operate under the Virgin Money brand.
- Virgin Money’s business 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 is the official sponsor of the London Marathon, the biggest annual fundraising event in the world. Virgin Money leads 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.
Northern Rock plc
- On 1 January 2012, Northern Rock was acquired by Virgin Money.
- Northern Rock is a bank, authorised by the FSA as a deposit taker and mortgage lender. It offers savings accounts and mortgage products to customers in the UK. New products are offered through both direct channels - including a national branch network - and mortgage intermediaries.