The Pros and Cons of Cash Isas

There's around £300 billion sitting in Cash Isas but with interest rates at rock bottom, many savers will wonder whether it's worth opening an account

James Gard 22 March, 2021 | 10:10AM
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Brits have been hoarding billions in cash since lockdown started, according to the Bank of England, and most of this money is languishing in savings accounts that don't even keep up with inflation. We’re not big fans of holding cash at Morningstar, and certainly not for the long-term, but it is sensible to have some cash to hand in case of an emergency, or to keep some powder dry to invest if an opportunity arises. 

Cash clearly holds a certain appeal for savers. Most recent HMRC data shows that three times the number of Cash Isas were opened than Stocks & Shares Isa. The same pattern can be seen in Junior Isas. So, what are the pros and cons of holding cash? 

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James Gard  is content editor for Morningstar.co.uk