Most British adults do not invest. More specifically two fifths of the British population have only ever had cash savings and a further fifth have neither saved nor invested. This poses a good question to start the new year: why should the average saver open a stocks and shares ISA?
Loads of marketing around stocks and shares ISAs focuses on the tax advantages of ISAs over unwrapped investments. Few mention specific reasons for investing that meet consumers’ personal goals. When looking at the stated goals of a ‘pure’ saver, what reasons are there for them to use stocks and shares ISAs?
In our latest UK Consumer Insights report we find that the average British saver’s financial goals are mostly either short– or very long–term. Their number one reason for putting money away is for an unexpected event. Financial security is second, followed by holidays. The fourth is to put money away for retirement, mentioned by a third of savers.
Do these goals sync with a stocks and shares ISA? On the surface, no. If the major goals are short–term, cash savings are likely to be more suitable. And for retirement, pensions are arguably the better investment vehicle. We regularly get asked how D2C propositions can grow the number of investors. Savers have many ‘needs’ competing for their money. What ‘need’ does a stocks and shares ISA meet, or indeed any non-pension investments?