More than half of investors have most of their money invested in cash, and 25 per cent are planning to continue to invest their money in cash based investment products, according to research from Fair Investment Company.
According to the research, although the current low interest rate environment has made 67 per cent of people review their investments in search of higher returns and to boost their incomes, 33 per cent have done nothing, with 12 per cent saying they are too nervous of the current climate to change their investments.
Of those who would choose to invest in cash, including bank and building society accounts and NS&I, 59 per cent of them would do this for easy access to their cash while the remainder - 41 per cent - choose cash for its security.
The Fair Investment Company is urging investors and savers to make the most of their ISA allowance - £7,200, or £10,200 for the over 50s of which £3,600, or £5,100 for over 50s can be in a
cash ISA.
"There is a lot of talk of diversifying assets and opting for riskier investments in order to improve returns, and this suits many people, but the bottom line is, most people are happiest in cash," says Nick Scarrett, head of pension and investments at Fair Investment Company.
"Our research reveals that for 51 per cent people, cash is the asset class to which they currently have the greatest exposure, and for 25 per cent of people surveyed, that is the way it is going to stay."
“If you are not using your cash ISA allowance, then you should remedy that right away - ISA investments are tax free, whereas a basic rate tax-payer will pay 20 per cent on your savings in a normal savings account.
"There are some great cash ISA rates available at the moment including RBS' Royal Deposit ISA - a 3 year fixed rate cash ISA that is currently returning 4 per cent.
"If you want instant access to your cash the new Barclays Golden ISA issue 2 has a market leading rate of 3.1 per cent, the
ING Direct Cash ISA is offering 2.5 per cent, both Alliance & Leicester and Santander have instant access ISAs paying 2 per cent on balances over £1 and 2.75 per cent on balances over £9,000 and
Scottish Widows E-Cash ISA is offering 2.10 per cent.
"But you'd better be quick, because the deadline for using your ISA allowance is April 5th and if you don't use it before the deadline you will lose it - you can't carry it into next year."
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