With the plummeting savings rates of recent years, savers are increasingly seeking alternative options to grow their pots and secure meaningful returns.

Rising risk appetite

A shift in behaviour driven by low savings rates, means that savers are developing a far more robust appetite to risk, with a growing number turning to riskier investments as they seek greater returns on their savings. Even so, the most popular financial products on the market still include savings accounts and ISAs.

Get the right balance

Despite this shift, security will still be key for many, which is why cash savings accounts remain a popular choice. However unsurprisingly, the standard Cash ISA is becoming less popular in favour of Stocks and Shares ISAs.

We’ve seen a huge surge in the number of savers turning to fully managed Stocks and Shares ISAs to boost their savings. A very different type of product to the Cash ISA, Managed ISAs are best described as a ‘wrapper’ rather than an account, protecting your returns from tax regardless of where it is invested. If your savings plan is long-term, investing your money in a diversified portfolio managed by an expert portfolio manager could be the smartest option.

This type of savings account is ideal for those who want the tax-efficiency of an ISA wrapper with the growth potential of the stock market, but you’ll need to make sure that you really are comfortable with the extra risk involved with this form of investing. Expert portfolio managers will seek value in the market to ensure you obtain the greatest possible returns possible for your investments.

Even if you take the plunge – which should only ever be considered after seeking professional financial advice – you will still need to strike the right balance between risk and security. In other words, don’t put all your eggs in one basket. While things like stocks & shares ISAs offer the potential for better returns, there’s still the chance you could lose money, so it’s often wise to split your savings between a variety of pots (such as a cash savings account and a high interest current account, as well as a stocks & shares ISA) to get the perfect mix of security and growth potential.

The decision that you make with your long-term savings, particularly if you’re thinking of investing in the stock market, could impact your finances for years to come, so it’s essential you choose wisely. This is why professional advice should always be sought, and remember that if you’re not comfortable with risk, traditional savings accounts can still provide a great home for your money.

Speak to our expert team today to discuss if a Fully Managed ISA is suitable for you. Give us a call on 0207 416 6806.