Biggest stocks and shares Isa pots 13 times the size of largest cash accounts

The UK’s top stocks and shares Isa investors have built fortunes worth more than 13 times the size of the biggest cash Isas typically, according to HM Revenue and Customs (HMRC) figures.

The average value of the top 25 stocks and shares Isas is around £8.8 million, compared with £650,000 for the top 25 cash Isas, the figures, obtained by money app Plum, show.

The figures covered the year 2021/22 and were rounded to the nearest £10,000.

In its response to Plum’s freedom of information (FOI) request, HMRC noted that it is possible for money in a cash Isa to have been previously been held in stocks and shares, therefore the money built up “does not necessarily consist of money accumulated through cash subscriptions alone”.

The minimum funds required for entry into the “top 25 club” for stocks and shares investors is £5.1 million, compared with £500,000 for cash savers according to the figures.

The figures were released by Plum ahead of the new tax year, which starts on April 6.

There has been speculation in recent weeks that the Government has been considering the possibility of lowering the limit on how much people can put into cash Isas per year, down to £4,000 from the current £20,000 ceiling.

Reports have suggested that this may be an idea for the longer term rather than an announcement in the 2025 spring statement.

Rajan Lakhani, head of money at Plum, said the data illustrates “the huge potential gains that can be earned through long-term stocks and shares investing”.

He continued: “That doesn’t mean that cash Isas don’t have a place at the heart of family wealth building however, especially when interest rates are relatively high like today.

“For example, a young couple saving towards a major purchase like a house within the next year might prefer the certainty of interest on cash savings versus the sudden fluctuations of the stock market. Especially given the current volatility in the US stock markets, heightened by concerns about an escalating global trade war.

“A cash Isa is also the ideal place to keep rainy day funds as a safety net against sudden life changes such as unemployment, illness or a large, unexpected expense. It’s important that people have a choice and flexibility over how to build their money in the way that’s right for their circumstances and mindsets. It all depends on your risk appetite.”

Richard Fearon, Leeds Building Society chief executive, said the mutual’s members have voiced their opposition to any potential reductions for cash Isa allowances.

Mr Fearon said last week: “Reducing the amount which can be saved either now or in the future would have significant effects on savers, on mortgage rates and on wider aims to increase the size of the mutual sector.”

Plum said its research, conducted by OnePoll in February among 2,000 people across the UK, indicates more than two-thirds (68%) of people believe the ceiling should stay as it is, while less than a fifth (18%) of cash savers said they would divert money to stock and shares.

Published: 19/03/2025 by Radio NewsHub