The number of savers using ISAs has fallen to an 18-year low as consumers seek alternative investment methods.
New account numbers fell to 10.8m in 2017/18, the lowest number since 2000, according to new figures published by HMRC today.
However, although there are fewer accounts, the amount of money being saved in ISAs has increased hugely – by £7.6bn to £69.3bn.
There was also a 28 per cent boost in the amount of money being saved in stocks and shares ISAs, a total of £28.7bn, which could suggest depositors are moving away from cash to alternative long-term investments.
Commenting on the trend, Sanlam UK senior wealth manager Carl Drummond said: "People are finally waking up to the fact that cash is not king. When it comes to ISAs years of low returns from high street banks has driven more people to look for greater returns elsewhere.
"In fact, large numbers of cash savers have seen their tax-free pots eroded by inflation. More and more people are turning to the stocks and shares ISA which in the long term can outperform cash by some margin."
Contributing factors to the decline in ISA take-up could include stagnant real wage growth that has put pressure on the public's ability to save, automatic pension enrolment and the £1,000 savings tax-free interest allowance, according to analysis from Aviva.
Its head of savings and retirement, Alistair McQueen, said: "Saving appears to have fallen out of fashion. This is not good for our long-term financial wellbeing, nor for the economy as a whole.
"Despite interest rates dragging along at record lows, a majority of those sticking with ISAs continue to invest in cash ISAs, which is often delivering lower returns than a stocks and shares one would.
"However, every cloud has a silver lining. Automatic enrolment has brought nearly 10m new savers into workplace pensions "
Scottish Friendly savings expert Calum Bennie added: "Today's ISA figures show that savers are increasingly seeing the potential of investing in stocks and shares ISAs as an alternative to deposit accounts that are providing people with pitiful returns.
"It's no wonder the appeal of cash ISAs continues to fall, with most banks, building societies and even National Savings failing to pass on August's interest rate rise to savers, sentencing them to a prolonged period of meagre returns on their money.
"Combined with increasing inflation and low wage rises, it all adds up to a particularly stretched economic outlook for consumers."
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