Hargreaves Lansdown clients transferred more money from banks and building societies into stocks and shares ISAs in the first half of 2025 than in the whole of 2024, according to the investment platform.
With the current average one-year fixed rate cash ISA offering 3.9% – down from 4.4% a year ago and 5.1% in 2023 – savers are looking for better growth potential.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said savers’ move into investing is an “incredibly positive development”.
“There is enormous scope for people to broaden their horizons and consider investing,” she said.
An Opinium survey of 2,000 people in April 2025 found that 19% of savers said they would switch from savings to investment if cash ISA rates fell.
Investing money that savers have put aside for the long term can “radically” improve financial resilience, Coles said, noting that investments have more growth potential over a five-to-10-year period compared to savings.
Yet some 6.4 million households have no arrears and more than enough savings to cover emerging needs, but no investments, according to Hargreaves Lansdown’s Savings and Resilience Barometer.
“They’re missing out on a major opportunity to boost their resilience in later life, so this trend could see them find a better balance for their finances,” said Coles.
It is also important to think about the best possible outcomes when building a child’s savings.
“Some 42% of the money paid into Junior ISAs in 2022/23 was in cash, which represents a huge missed opportunity,” she said.
“Investments have far more growth potential over longer periods, and up to 18 years definitely qualifies as a longer time horizon.”
However, data showing savers switching from savings to a stocks and shares ISA does not necessarily mean they are fundamentally rethinking their portfolios but could instead be trying to guess what asset classes might do better in the coming months and years, Coles said.
“Unfortunately, this overlooks the fact that saving and investing are fundamentally different beasts,” she warned.