Savers across Britain are being warned about a “myth” that could be leaving them thousands of pounds out of pocket. An expert has debunked false claims about ISAs that are wide of the mark.
Recent data shows that over half of Brits feel anxious about investing their money due to persistent myths. However, it is said that opting for a traditional savings acount over a Stocks and Shares ISA could leave people up to £42,000 worse off over a twenty year period.
Antonia Medlicott, founder and managing director of Investing Insiders, has reiterated that ISAs are not risky. She has urged people not to be put off investing their cash out of fear, reports by GB News.
She said: “Fear is the main reason that puts people off using an ISA, as there is a risk that your investments can drop based on the markets. However, if you invest for longer-term goals, you don’t need to be as concerned about a short-term loss, because the markets generally go on to recover over time.”
Stocks and Shares ISAs have outperformed savings accounts over recent years. Someone starting with £5,000 and contributing £50 monthly would accumulate £69,058 after 20 years in a Stocks and Shares ISA compared to £27,452 with a savings account returning 3.5%.
Ms Medlicott added: “Not enough people realise that if you have your money in a savings account with a low interest rate, or a current account that doesn’t pay any interest at all, then you are losing money.”
Savers are also deterred by the misconception that you need a lot of money to open an ISA. However, just £1 is enough to get started.
Ms Medlicott explained: “Don’t let the £20,000 allowance put you off, as this amount doesn’t have to be used. Even placing small amounts of money into an ISA will add up over time.”
This story originally appeared on Express.co.uk
