After a relatively calm 2017, stock markets have definitely been more volatile since the beginning of this year. However, with high inflation and low interest rates, we still think Stocks & Shares ISAs may offer good opportunities for investors who are able to tolerate the ups and downs.
Inflation is the rate at which prices for goods and services rise and, as a result, buying power falls. Right now cash ISA interest rates are below inflation, with Consumer Prices Index (CPI) inflation at 2.4%* and the highest yielding cash ISA paying just 1.69%**. This means that your cash savings are likely to be growing less quickly than prices are rising – so even if your savings account balance isn’t decreasing, you’re actually losing money in real terms.
Cash ISA interest rates are below inflation.
Risks and returns
If you are concerned about inflation and can tolerate a higher degree of investment risk, you could consider moving some of your cash savings into a Stocks & Shares ISA. Investments have the potential to give you higher returns than Cash ISAs, in excess of inflation. Of course, investing comes with risks. Stock markets can fall and you could end up with less money than you started with.
Investments have the potential to give you returns in excess of inflation.
How we can help
At Tilney, we offer a range of services where our experts can help you with your investments. We can give you advice on all your investment decisions, or manage your investment portfolio for you – deciding which investments to buy or sell and when to do so. Please get in touch to find out more about our range of investment services.
For more information on investing or using your ISA allowance please call us on 020 7189 2400 or email firstname.lastname@example.org.
This article was previously published on Tilney prior to the launch of Evelyn Partners.