We examine the average ISA investment by age and whether you should have more Stocks and shares ISAs are a great way to build long-term wealth, but are they undervalued in comparison to cash savings?
In favor of lower-risk, lower-reward cash savings, do British citizens ignore their stocks and shares ISAs?
Your top priority right now is probably making the most of your annual ISA allowance as the tax year draws to a close.
However, you run the risk of ignoring your stocks and shares ISA in favor of alternatives, such as cash ISAs, if you're like most British people.
British people are oddly hesitant to invest in these better-performing products, despite research showing that stocks and shares ISAs outperform cash ISAs. Also, women prefer to stick to cash.
"A new administration in the US, shifting geopolitical risk, and economic uncertainty at home are just a few of the many factors weighing on UK investors this ISA season," says James McManus, chief investment officer at digital wealth manager Nutmeg. In actuality, each of these will have an impact on the performance of the markets this year, the degree of volatility we observe, and the returns that investments will yield, albeit to varying degrees.
Prioritize other financial goals before considering adding to a stocks and shares ISA. According to Dan Coatsworth, an investment analyst at AJ Bell, you should pay off any expensive debts you have first and make sure you have a rainy-day fund that is kept in an accessible account with the highest interest rate available.
According to Coatsworth, "experts generally advise you to aim to keep around three months fixed expenses handy as a very rough guide."
In spite of this, it seems that a lot of British people are extremely frugal with their money and prefer to save rather than invest, even though the latter usually produces better long-term results.
What is the typical amount in an ISA for stocks and shares?
In the 2022 - 2023 tax year, roughly 30.8 million stocks and shares ISAs were subscribed for, compared to 7.9 million cash ISAs, according to the most recent data from the Office for National Statistics (ONS).
Although there are less than half as many stocks and shares ISAs as cash ISAs, the average amount subscribed is lower (28 billion in stocks and shares ISAs versus 41.6% in cash ISAs), even though the average stocks and shares ISA contains more money (7,355 versus 5,296).
Men are more likely to invest in ISAs than women, suggesting that there is a gender gap in the types of ISAs used by British citizens. In the most recent year for which statistics are available, 2,789 men opened cash ISAs, while 1,907 men withdrew stocks and shares ISAs.
The corresponding figures for women are 3,736 for cash ISAs (higher than the male equivalent) and 1,413 for stocks and shares ISAs (lower than the male equivalent).
When it comes to where they invest their money, British women in particular seem to be failing themselves, as stocks and shares ISAs returned an average of almost 12 percent over the last year, while cash ISAs returned less than 4 percent.
Age-based ISA investments.
The age difference in the amount that British citizens invest in their ISAs is more comprehensible.
Keep in mind that the table below includes all types of ISAs, not just those for stocks and shares.
Ons is the source.
Unit trusts are the next most popular option among UK investors, after OEICs. Shares were the most popular stock and share ISA investment after these fund types.
The cash component of this is abnormally high, almost equal to the amount invested in European or British stocks, which supports the idea that British investors are unduly risk averse.
When they do make investments, though, it seems like they have confidence in their home market.
66 percent of British investors said they were allocating in the UK, making it the most popular equity market, according to research from Nutmeg and Opinium.
Chart displaying the top international markets for UK investors as of January 2025.
(Image credit: Source: Opinium survey conducted via Nutmeg among 1,000 UK investors from January 916, 2025. A globally diversified portfolio ranked fourth on the list at 21 percent, while the US came in second with 48 percent.
"UK investors are prioritizing their home market this year despite the negative news surrounding the economy," McManus stated. Holding UK stocks alongside those in the US, emerging markets, Europe, and other regions might be the best strategy to profit from global megatrends, lower your investment risk, and identify new winners.
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