You can’t turn on the news without hearing about the soaring cost of living and rising inflation. But what can you do to stay ahead of inflation in the long run?

One simple answer could be to maximise your ISA allowance before the tax year-end – but only if you choose an ISA that gives your savings the opportunity for long-term growth, meaning an appropriately invested Stocks & Shares ISA.

With UK inflation at a 30-year high, we explain why a Stocks & Shares ISA could make a real difference to your long-term financial security.

Cash is unlikely to deliver what you need

We are all feeling the higher costs of shopping bills, energy prices and eating out but we don’t always see or feel the long-term impact to our savings and investments.

Inflation – which is a measure of how much prices go up by – reduces the purchasing power of your money and erodes its ‘real’ value over time. Latest, Bank of England figures show annual inflation averaged 2.9% over 40 years (1981-2021*). So, if your savings haven’t been growing at or above this rate, their real value will have fallen.

While cash ISAs and other savings products are useful for short-term goals, their interest rates tend to be very low. If you’re looking for long-term inflation-beating growth, a cash ISA is unlikely to deliver what you need.

So why use Stocks & Shares ISAs?

If you have enough cash set aside for emergencies, and short term expenditure requirements and are willing and able to take on some investment risk, a Stocks & Shares ISA could give your money the opportunity to grow over the long term.

If you were able to invest your full £20,000 ISA allowance every year for ten years, assuming investment growth of 5% after fees and before inflation, you could build up a pot worth just over £260,000, thanks to the power of investment growth and compounded returns.

Now investing comes with its own risks and a 5% annual return is not guaranteed, as investments can go down as well as up.

Remember ISAs are tax-efficient

If you invest through an ISA, gains are exempt from capital gains tax (CGT). ISAs also shield your money from income tax. This makes them especially advantageous for higher or additional rate taxpayers.

Finally, you don’t pay tax on dividends from investments held inside an ISA, which means even more of your money will go towards your future.

Why you should act now

ISAs have a ‘use it or lose it’ allowance, so if you don’t use your full £20,000 allowance by 5 April each year, it is gone for good.

With inflation showing no signs of easing in the short-term, making the most of your allowance through a Stocks & Shares ISA could prove more important than ever.

It is also worth noting that it is possible to transfer any Cash ISAs you have built up to Stocks & Shares ISAs if appropriate to do so.

Get in touch

Brunel Wealth provides independent financial planning to Business Owners, Entrepreneurs and Senior Executives. Helping turn successful careers into rewarding lifestyles.

Get in touch with our friendly team to see if we can help you.

Brunel Wealth provides independent financial planning to business owners, entrepreneurs and senior executives. Helping turn successful careers into rewarding lifestyles.

Contact our friendly team at or call our Bristol office on 0117 325 2224.


(*) Bank of England inflation calculator

  • This article is offered only for general informational and educational purposes. It is not offered as and does not constitute financial advice. You should not act or rely on any information contained in this website without first seeking advice from a professional.
  • Levels and bases of taxation are subject to change.
  • Because investments may go down in value as well as up, you may not get back the full amount invested.

Brunel Wealth Ltd is regulated as an Appointed Representative (AR) of Best Practice IFA Group Ltd which is authorised and regulated by the Financial Conduct Authority. FCA Number: 223112