Andrew Prosser, head of investments at InvestEngine, said: “Moneyfacts data which reveals that, in real terms, some savers have lost as much as 19p per £1 saved since 2020, due to inflation outpacing savings rates, highlights exactly why people need to consider investing alongside saving, particularly for long-term goals.
“While cash savings are important for emergency funds and short-term needs, they do not offer long term inflation protection because, as these figures show, inflation quietly erodes the real value of money over time if interest rates fail to keep pace.
“Over the longer term, the difference between saving and investing is even more stark; InvestEngine analysis shows someone who consistently invested their full ISA allowance since 1999 into a Stocks and Shares ISA could have built a pot worth more than £1.3 million, compared to around £418,000 for someone saving the same allowance into a Cash ISA.
“With the Cash ISA allowance falling to £12,000 from April next year, now is a good opportunity for savers to consider investing; the easiest first step is to put at least part of their allowance into a Stocks and Shares ISA, where their money has greater potential to deliver inflation-beating growth over the long term.”
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