ISA subscriptions fall as savings rates continue to dwindle

The number of cash ISAs subscribed to fell by 0.2 million and the number subscribing to stocks and shares ISAs also fell by 0.2 million.

Recent Moneyfacts recorded 16 savings rate rises in June compared to 154 rate reductions, with some deals falling by as much as 1.00%.

However around 740,000 Junior ISA accounts were subscribed to in 2015-16, up from 510,000 in 2014-15.

Additionally, around £80 billion was subscribed to Adult ISAs in 2015-16, an increase of £1 billion compared to 2014-15. This follows a much larger increase in 2014-15 of £20 billion due to the changes to ISA regulations implemented in 2014 which increased the annual limit significantly to £15,000 in any combination of cash and stocks/shares.

Total ISA assets have exceeded £0.5 trillion for the first time. At the end of 2015-16 the market value of Adult ISA holdings stood at £518 billion - a 7% increase compared to the value at the end of 2014-15. These holdings are split almost equally between cash ISAs (52%) and stocks & shares ISAs (48%).

The market value of cash holdings has increased by 6%, compared to the year before. The market value of funds held in stocks and shares increased by 9%.

Danny Cox, Chartered Financial Planner at Hargreaves Lansdown, commented: "Savers and investors have had all but the kitchen sink thrown at them with volatile markets, plunging savings rates, tax changes and new ISA varieties to get their head around.

"The recent Help to Buy ISA debacle will no doubt be disappointing for many of the savers who were hoping to use the government bonus to fund their deposit, but actually can’t get hold of it until after their house purchase has gone through.

"However traditional cash and stocks and shares ISAs have been the saver and investor’s friend for the best part of two decades, and continue to be a stalwart of good, blue-chip financial planning."