Stocks and Shares ISAs offer alternatives to Cash ISAs

Chancellor Rachel Reeves may change or reduce the £20,000 tax-free allowance for Cash ISAs, which have been around for 26 years. Any changes, if they happen, will likely come later this year. There will be no announcements in the upcoming Spring Statement. If you are worried about Cash ISAs, consider switching to a Stocks and Shares ISA. Some of these accounts offer fixed interest rates while you decide how to invest your cash. Laura Suter, a finance expert, noted that you don’t need to be a wealthy investing expert to start. Many platforms allow you to begin with as little as £25 a month. Cash ISAs are good for emergency funds but not great for long-term wealth. For example, saving £1,000 each year in a Cash ISA since 1999 would only give you around £34,400 today. However, if you had invested in a global markets fund instead, you could have about £83,600. That’s nearly £50,000 more. Many investment platforms have low minimum starting amounts. They often provide tutorials and guidance for beginners. Once you start investing, keep in mind that you will pay fees and annual management charges. Anita Wright, a financial planner, suggests shopping around for a DIY investment app that fits your needs. Different apps offer various interest rates on uninvested cash. For instance, Trading 212 and Freetrade provide interest on account cash, but the rates can differ. Always do your research, as investing involves risks and past performance does not guarantee future results.