The amount of money savers put into cash Individual Savings Accounts (ISAs) has fallen, data published by HM Revenue & Customs (HMRC) has revealed.
During 2016/17, £39.2 billion was saved using cash ISAs – a significant fall when compared to 2015/16’s figure of £58.7 billion.
The data also revealed that the amount invested in stocks and shares ISAs reached a ‘record high’ of £22.3 billion in 2016/17, up from £21.1 billion in 2015/16.
Meanwhile, separate data published by the Office for National Statistics (ONS) revealed that the savings rate fell to 1.7% during the first quarter of 2017.
The ONS stated that the savings ratio has been falling ‘since 2015’, and suggested that it has been affected by low interest rates, which have helped to reduce the return on accounts.
Commenting on the data, Steve Webb, Director of Policy at Royal London, said: ‘These latest figures show that the shine has really come off cash ISAs.
‘Low interest rates, coupled with rising inflation, mean that cash ISAs have delivered negative real returns year after year.
‘It is to be hoped that this slump in saving through cash ISAs means that investors have started to realise the risks associated with keeping their money in cash.’