Cash ISA subscriptions down, stocks and shares ISA subscriptions steady

Commenting on the ISA subscription data released by HMRC, Richard Stone, Chief Executive of The Share Centre, commented:

With the savings ratio at an all-time record low of 1.7% it is clear the Government needs to do more to encourage savings and investments and the increase in ISA allowance to £20,000, introduction of the LISA and reduction in Capital Gains Tax are all welcome.

While the latest data from HMRC shows a substantial fall in ISA subscriptions it is interesting to note that the fall is wholly down to a drop in amounts saved into Cash ISAs. This reflects our own experience as we saw subscription levels into our Stocks and Shares ISAs on a par in 2016-17 with those seen in the prior year. This also perhaps reflects a growing appreciation amongst savers and investors of the impact of inflation on cash savings at a time of low interest rates.


Specifically rates in real terms continue to be negative – holding savings in cash effectively costing savers money in terms of the purchasing power of those savings over time. As inflation has increased, this problem has only become more exaggerated and this data from HMRC potentially shows savers reaction to that.

What is hard to determine is the impact of the Government’s tax changes, such as the introduction of £1,000 of interest income being tax free per annum. This has undermined slightly the benefits of saving into an ISA and while in the short term savers may consider they can be equally served outside of an ISA they should not overlook the cumulative benefit of building up a pot of savings within an ISA through contributions over a number of years.

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