Savers racing to use up their ISA allowance before the end of the tax year face a stark choice – play safe with cash or chase stronger gains in the stock market.

The average stocks & shares ISA fund delivered 11.22% growth over the past 12 months – more than three times the return of a typical cash ISA, according to new figures from Moneyfactscompare.co.uk.

By comparison, over the same period, the average cash ISA paid a much lower 3.48%, which was down on the previous year.

It marks another consecutive year that investment ISAs have beaten their cash rivals.

But millions remain wary. Research from Aviva found 55% of consumers have no investments at all, while 39% believe investing is too risky.

Rachel Springall, finance expert at the firm, said: “Stocks & shares ISAs have now outperformed cash ISA returns for a consecutive year.

“Over the past 12 months alone, investing in stocks & shares has returned three times more to savers than a cash ISA, based on average returns.

“This should be a wake-up call for those who fear investing, as cash returns have diminished. However, it is important to not rely on returns over the shorter-term when making longer-term investment decisions.”

She added: “It is going to take a lot more than positive returns to encourage an investing culture in the UK.

“Not every saver will feel confident enough to invest, but if they get good guidance, they can start small and slowly gain more knowledge to encourage them to increase their deposits.”

The best – and worst – performing sectors

Ms Springall said: “There is no denying that the rise in gold prices, and general demand over raw materials, like metal and oil, had a heavy influence on fund performance over the past year, with the top performing sectors, including Commodities and Natural Resources, returning 28.83%.

“The sectors to bounce back from negative returns over the previous 12 months include Latin America, returning 38.24% compared to -11.15% between 2024 and 2025, with high commodity prices, political changes and currency strength observed to boost the sector.”

Five-Year ISA Performance Snapshot

Stocks & Shares ISA (Average Fund Growth)

Period                                   Average Return

Feb 2025–Feb 2026                11.22%

Feb 2024–Feb 2025                11.86%

Feb 2023–Feb 2024                 2.80%

Feb 2022–Feb 2023               -3.27%

Feb 2021–Feb 2022                 6.92%

Cash ISA (Average Rate)

Period                                 Average Rate

Feb 2025–Feb 2026              3.48%

Feb 2024–Feb 2025              3.80%

Feb 2023–Feb 2024              3.73%

Feb 2022–Feb 2023              1.71%

Feb 2021–Feb 2022              0.51%

Tax squeeze adds pressure

Cash ISAs remain popular, particularly as more savers are dragged into higher tax bands.

Ms Springall warned: “A cash ISA will continue to be an attractive choice for savers, particularly those moving up from being a basic-rate taxpayer to a higher-rate taxpayer. Fiscal drag is causing millions of savers to have their Personal Savings Allowance (PSA) halved, down from £1,000 in earned interest to just £500.

“ISAs will be an essential part of any saver’s portfolio to shield returns from tax, but many will need to revisit their cash ISA plans in the years ahead due to upcoming limit changes. Indeed, from 6 April 2027, savers will see their cash ISA limit reduced to £12,000, but those aged 65 and over will continue to be able to save up to £20,000 in a cash ISA each year.

“The intention of the cut is to drive consumers to invest more, but anyone concerned should seek advice in the first instance to see how this will impact them.”

The Government is also planning a Retail Investment Campaign by April 2026 aimed at encouraging more people to invest.

She added: “Investing for longer to ride out any storms in the stock market is generally considered a wise choice, but savers need to feel encouraged to monitor their pots and consider seeking other funds if they are seeing consecutive periods of poor performance. Risk appetites can also change over time, some investors might want to move their pots from higher volatile funds, or even invest in ethical funds.

“Those who use investment platforms should also be encouraged to regularly review any management fees, as the most cost-effective choice can vary depending on the size of someone’s portfolio. Whether large or small, experienced and novice investors might need to shift their pots from a platform if they are unhappy with any new fee structure.”