How to kick the cash habit and pick a stocks and shares Isa

T

he chancellor, Rachel Reeves, wants more of us to reap the rewards of investing but many savers just do not want to invest or do not know where to start — now is a good time, though.

Last week the Bank of England cut the base rate to 4 per cent, the lowest it has been since March 2023. Where the base rate goes, cash Isa rates tend to follow — so how can savers missing out on the stock market make the jump? Here, Money explains why a stocks and shares Isa might work for you, how to pick one and how to start investing.

Where to start

Savers ploughed more than £41.6 billion into cash Isas in the 2022-23 tax year, compared with £28 billion into the stocks and shares equivalent. Reeves thinks cash savers are missing out on better long-term returns.