Cash ISAs are one of the easiest investments to understand and start saving into. They save you money on tax and can provide a return. However, as women in midlife, we have to understand the role that cash ISAs play and why we shouldn’t overly rely on them. Danni Hewson of AJ Bell spoke with Eleanor Mills and our Queenager community about risk. As part of that, she explained why we should rethink our cash ISAs.
Danni says:
The reason that I wanted to talk to you about cash is that women, Despite what we often say, women do have money. They are interested in investing. They are interested in making sure that they’re not paying tax when they don’t need to. So we have a lot of women who have cash ISAs. That’s the sort of investment default of choice for women.
They’d ISA because they understand cash. They don’t understand bonds. They don’t understand equities or shares or stocks. you want to call them, but they understand cash, except when you invest in cash, even though you are making money in terms of interest and, you know, over the last couple of years with interest rates actually creeping up substantially, you’ve been talking, maybe you’ve got 6 percent hurrah, except Then you have inflation and inflation will nibble and nibble and nibble away at your investment.
Watch the video for why you should rethink your cash ISA
So what you’ll have in your bank is actually worth less than it was when you put in. And, and that is quite. an important issue that I think a lot of women just haven’t really got to grips with. And if you look at the difference between a cash ISA, if you’d invested 10, 000 at the beginning of 2014, it would have been worth 11, 222 pounds after 10 years.
After inflation, you can see exactly what’s happened to it. Whereas £10,000 invested in a global stock market tracker, That’s a fund, an equities fund that would have been worth £30,172. And that is, as you can see there, the Fidelity Index World that one of my colleagues crunched some numbers for me.
That also has been nibbled away by inflation, but as you can see, not so much. So in a nutshell, it is about trying to demystify risk a little bit. I think it’s about trying to get a little bit of knowledge and that’s why webinars like this and the articles that are on the NOON website, the articles that are on the AJ Bell Money website are really helpful.
