For deposits in March 2022:
- 31% of clients that deposited in a Stocks & Shares ISA left money in cash compared to 25% in 2021 and 25% in 2020
- 63% of clients that deposited in a LISA left money in cash compared to 59% in 2021 and 56% in 2020
- 42% of clients that deposited in a JISA left money in cash compared to 39% in 2021 and 38% in 2020
- Overall 37% of clients that deposited in an ISA left money in cash, compared to 30% in 2021 and 29% in 2020
Emma Wall, Head of Investment Analysis and Research:
“It’s been a rocky start to 2022 for stock markets, with inflation, rising interest rates and war all adding to price volatility. It is hardly surprising therefore to see investors are reticent take the plunge with their ISA. But luckily you don’t have to invest now to gain the benefits of this year’s tax wrapper – you can park your allowance in cash, and decide where to invest once the outlook is clearer. Investors should be mindful that timing the market perfectly is near impossible however, so waiting for total certainty can mean missing out on gains.
Instead, consider drip feeding your portfolio, or setting up a direct debit to automate the decision. Remember that a well-balanced portfolio is the best way to combat market volatility, and should offer exposure to mix of higher-risk asset such as equities alongside lower-risk assets such as bonds. Funds focused on capital preservation, such as strategic bond funds, and multi-asset funds with a cautious approach are good additions to an equity portfolio if you struggle to navigate the uncertainty.”
