A quarter of investors are planning to stick to cash investments, despite low interest rates.

·25% will stick to cash investments
·51% have most of their investments in cash
·12% are too nervous of current climate to switch

According to research from Fair Investment Company, more than half of investors have most of their money invested in cash, and 25% are planning to continue to invest their money in cash based investment products.

 “There is a lot of talk of diversifying assets and opting for riskier investments in order to improve returns, and this suits many people, but the bottom line is, most people are happiest in cash,” explains Nick Scarrett, head of pension and investments at Fair Investment Company.

“Our research reveals that for 51% people, cash is the asset class to which they currently have the greatest exposure, and for 25% of people surveyed, that is the way it is going to stay.”

According to the research, although the current low interest rate environment has made 67% of people review their investments in search of higher returns and to boost their incomes, 33% have done nothing, with 12% saying they are too nervous of the current climate to change their investments.

Of those who would choose to invest in cash, including bank and building society accounts and NS&I, 59% of them would do this for easy access to their cash while the remainder – 41% – choose cash for its security.

Make the most of your ISA allowance

“If you are investing in cash and you are not getting the returns you want, it is worth looking at other investment options such as funds, structured products and OIECs – yes, they have more risk, but also offer potentially much better returns,” says Nick.

“If you do want to stick to cash it is still worth reviewing your current investments and seeing if you could do better from a different product. For example, if you are not using your cash ISA allowance, then you should remedy that right away – ISA investments are tax free, whereas a basic rate tax-payer will pay 20% on your savings in a normal savings account.

Get rates of up to 4%

“There are some great cash ISA rates available at the moment including RBS’ Royal Deposit ISA – a 3 year fixed rate cash ISA that is currently returning 4%.

“If you want instant access to your cash the new Barclays Golden ISA issue 2 has a market leading rate of 3.1%, the ING Direct Cash ISA is offering 2.5%, both Alliance & Leicester and Santander have instant access ISAs paying 2% on balances over £1 and 2.75% on balances over £9,000 and Scottish Widows E-Cash ISA is offering 2.10%.

“But you’d better be quick,” says Nick, “because the deadline for using your ISA allowance (£7,200, or £10,200 for the over 50s of which £3,600, or £5,100 for over 50s can be in a cash ISA) is April 5th and if you don’t use it before the deadline you will lose it; you can’t carry it into next year.”