Policy & Regulation
Aviva comments on HMRC's Individual Savings Account (ISA) statistics
26 June 2020 -

Alistair McQueen, Head of Savings and Retirement at Aviva comments: "Today's figures show that ISA savers continue to be a risk-averse breed1.

"The 10.6% rise in ISA subscriptions in 2018/19 was driven by a bumper year for cash ISAs. Cash ISA subscriptions rose 20%, while stocks & shares ISA subscriptions fell 16%. Cash ISA subscriptions in 2018/19 represented 76% of all ISA subscriptions that year; up from 70% in the previous year.

"This love of cash comes despite the Bank of England setting historically low interest rates2. Many cash ISA savers will have actually achieved a negative rate of return last year as a result of inflation averaging above 2% in 2018/19, higher than the Bank of England's base rate. Meanwhile, stocks & shares ISAs, as measured by the FTSE 100, rose 3.7% over the same period.

"The Bank of England has projected a near trebling of the household savings ratio in 20203, partly the result of a sharp fall consumer spending as individuals look to build cash buffers to help mitigate the economic decline caused by the coronavirus crisis. The desire to save during times of uncertainty is understandable. All savers should ensure their savings are working as hard as possible; be that in bank accounts, ISAs, pensions, or elsewhere."

-Ends-

Sources:

1 https://www.gov.uk/government/statistics/individual-savings-account-statistics

2The Bank of England base rate rose from +0.5% to +0.75% In 2018/19

3 The Bank of England's latest Monetary Policy Report predicts household savings ratio to rise to 17% from 6%. The latest report can be found here: https://www.bankofengland.co.uk/-/media/boe/files/monetary-policy-report/2020/may/monetary-policy-report-may-2020

Media enquiries:

Fiona Whytock, 07800 692299

Notes to editors:

· For information on how Aviva is helping our people, customers and communities impacted by COVID-19 visit: www.aviva.com/covid-19-our-response/

· Aviva is a leading international savings, retirement and insurance business. We exist to be with people when it really matters, throughout their lives – to help them make the most of life. We have been taking care of people for more than 320 years, in line with our purpose of being 'with you today, for a better tomorrow'.

· Our vision is to earn our customers' trust as the best place to save for the future, navigate retirement and insure what matters most to them. In 2019, we paid £33.2 billion in claims and benefits on behalf of our 33.4 million customers.

· We operate through five business divisions: Investments, Savings & Retirement; UK Life; General Insurance; Europe Life; and Asia Life; and focus on three strategic priorities: deliver great customer outcomes, excel at the fundamentals and invest in sustainable growth.

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