Despite ultra-low interest rates, almost half of those planning to take advantage of a tax-free account will opt for a cash ISA this year, rather than a stocks and shares ISA which is favoured by a third.
In addition it was found that approximately one-in-five will be looking to open both a cash, and a stocks and shares ISA, with only 2% of over 50s considering an investment ISA for the first time.
Saga Investment Services head of product, Sally Merritt, said: “Savers have had it extremely tough over many years now and yet many still feel uncertain about making the switch to investing.
“This is largely because people don’t know quite where to start and they are wary of the risk. However, people need to make their money work harder for them – not just to give them a higher level of income, but also simply to stop their money losing value in real terms.
“Ultimately, holding cash which earns less interest than the rate of inflation means that people are losing spending power. And the compounded effect of this over a number of months or years could be much bigger than they realise.”
The latest research involved interviewing 9,128 people aged 50 and over in December last year, revealing that two-thirds of people in this age category currently have a cash ISA and four-in-ten hold a stocks and shares account.
It was also found that there is a big difference between the sexes when it comes to choosing an ISA, with 58% of women favouring cash and 27% an investment account, while 41% of men would prefer a cash account and 38% a stocks and shares ISA.
Regionally it was seen that more than twice as many Londoners are willing to take out an investment account than those in the North East, with over 50s from Yorkshire and the West Midlands most likely to opt for cash ISAs.
“If people have a good cushion of cash savings, say enough to cover 6 to 12 months worth of living expenses, then it may make sense to try investing with some of their additional cash savings,” Merritt continued.
“Investing should be a long-term plan, we suggest 3 to 5 years as a minimum to help even out the rises and falls in the market.”