Newly released data from HM Revenue & Customs (HMRC) has exposed a dramatic wealth gap between Britons who invest and those who save, revealing that the most valuable stocks and shares ISAs are worth an average of 17 times more than the largest cash ISAs.
The Stark Divide in Savings and Investment
The figures, obtained through a Freedom of Information (FOI) request by investing platform InvestEngine, detail the landscape for the 2022/23 tax year. They show that the average value of the top 25 stocks and shares ISAs stood at a colossal £10.98 million.
In sharp contrast, the average for the top 25 cash ISAs was significantly lower at £640,000. The data, which was rounded to the nearest £10,000 and based on account numbers rather than individuals, highlights the profound long-term benefits of investing in markets over holding cash.
Millionaire ISA Accounts and the £500,000 Mark
Delving deeper, the HMRC document revealed there were approximately 3,080 ISA accounts with a market value exceeding £1 million in the same tax year.
The disparity is even more pronounced when looking at accounts holding half a million pounds or more. HMRC recorded only 30 cash ISA accounts containing £500,000 or more. Meanwhile, a staggering 38,680 stocks and shares ISAs held at least that amount.
Furthermore, while around 1,530 cash ISAs contained £250,000 or more, the number of stocks and shares ISAs at that level was vastly higher at 244,570.
Budget Speculation and Expert Commentary
This data emerges amidst intensifying speculation about potential changes to ISA allowances, with Chancellor Rachel Reeves due to deliver her Budget shortly.
Andrew Prosser, Head of Investments at InvestEngine, commented that the FOI data "reveals a clear and growing divide between saving and investing."
He added: "While cash ISAs will always have an important role, especially for shorter-term financial needs, the figures set out clearly the value of long-term investing." Prosser emphasised that the pattern holds true beyond the top tier of accounts, stating, "The difference reflects how consistent investing has proven to be the most effective route to building meaningful, long-term wealth."
