Cash ISA holders could possibly make an extra £230k for retirement – are you one of them?
Investing your hard-earned money in a Lifetime ISA stocks and shares account, as opposed to a Lifetime ISA cash account, may be something Britons don’t want to neglect.
If holders of this account shift the money from their ISA to a stocks and shares ISA instead, they might have an extra £230,000 for retirement. According to AJ Bell’s analysis of the Barclay’s Equity Gilt Study, UK shares have returned 5% above inflation since 1899, while cash has returned 0.7 percent above inflation.
AJ Bell made it plain that they had no idea what returns will be in the next 20 or 30 years, which is typical of any investment.
Past performance does not guarantee future results.
However, there has been a significant difference in the amount you gain from shares versus cash during the last 100 years.
There are many different things that people might invest in, and not all of them are guaranteed to return a profit.
However, when addressing these figures in general, Andy Webb of the Cash Chats Podcast provided an example of what it would be like for someone who wants to begin investing right away.
“Broadly, based on these figures, a 30-year-old now paying the maximum £4,000 per year into the Lifetime ISA, up to the age of 50, which is the limit to pay into it, the amount of money they have in, plus the £1,000 they would have every year on that four thousand, up to the age of 50, the amount of money they have in, plus the £1,000 they would have every year on that four thousand,
“They’d have a pot worth £174,706 if they kept it in cash.
“This is predicated on interest rates that are higher than inflation.
“However, if they had invested it in stocks and shares, that same pot of money would have grown to £404,874 over the 30 years from when they first started investing to when they claim it at 60.
“Wow, that’s huge. That’s a difference of £230,000.
“It definitely demonstrates the value of long-term investing.”
According to the research, 60% of persons who utilized the Lifetime ISA for retirement purposes had it in cash.
Because lifetime ISAs cannot be opened once a person reaches the age of 40, there is still time to save for retirement as long as it is done before then.
When it comes to investing, the “Brinkwire Summary News” is a good place to start.