The Individual Savings Account (ISA) is the best savings and investing product on the planet, I think. Tax protection on capital gains, dividends and interest provides better returns and extra cash to boost the compounding process. What’s more, withdrawals are safeguarded from income tax.

Yet the overall returns delivered by the Cash ISA and Stocks and Shares ISA are considerably different. According to Moneyfacts, the average yearly return on the cash product was a miserly 1.79% between 2010 and 2025.

The investing ISA, meanwhile, has delivered a far superior 6.79%. In monetary terms, this translates into a substantially greater cash sum. Of course, this is an average figure. Different stocks would have yielded very different returns, so the exact return would have varied for each investor.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

What’s the difference?

Let’s use a £20,000 investment made in 2010 to illustrate the wealth gap. If someone put this into a Cash ISA and didn’t touch the interest, they’d have £26,155 sitting in their account in 2025 based on those long-term averages.

The return on the same lump sum in a Stocks and Shares ISA would be a whopping £55,222, meanwhile, with dividends reinvested. That’s more than double the return of the cash product. This demonstrates perfectly the impressive long-term wealth creation of the stock market.

In reality, though, the return of the equities investor vs the cash saver would likely have been greater. This is because most people drip-feed money into their savings and/or investing accounts over time.

With an extra £500 a month parked in a Cash ISA, the total return over 15 years improves to £129,307. For a Stocks and Shares ISA? That comes in at a brilliant £210,842, meaning an even wider difference in cash terms.

Here’s what I’m doing

It’s important to remember, though, that the Cash ISA has some big advantages over the stocks equivalent. Savings products carry no risk, excluding the unlikely scenario where the account provider goes bust. And they provide a guaranteed return. Shares don’t carry the same assurances. In fact, it’s possible theoretically for investors to lose all their cash.

For this reason, I’ve taken two steps to protect my money while still targeting high returns. I hold money in cash, but put most of it in stocks. And in my shares portfolio, I hold roughly 20–25 stocks to help me manage risk.

Primary Health Properties (LSE:PHP) is a share I’ve just bought for my portfolio. It’s not totally without risk, as rising interest rates can hit earnings. But it’s still a pretty secure way to get stock market exposure.

Why? Well as the name implies, it rents out medical facilities like GP surgeries, and receives a steady stream of income. Healthcare assets like this remain in constant demand. And what’s more, rents are backed by government bodies like the NHS, basically eliminating the chance of rent defaults.

Primary Health has raised dividends every year since the mid-90s, underlining its resilience. And today its dividend yield is 7.7%. For ISA investors looking for low-risk ways to invest, I think it’s a great stock to consider.

The post £20,000 invested in an ISA a decade ago is now worth… appeared first on The Motley Fool UK.

More reading

• How to invest £10,000 to aim for a £6,108 annual passive income
• How to earn a tax-free second income from UK property without purchasing a buy-to-let
• No savings at 40? Just £5 a day in an ISA could deliver a £16,000 second income
• 2 passive income ideas for a Stocks and Shares ISA
• 2 UK shares with over 20 years of consecutive dividend growth

Royston Wild has positions in Primary Health Properties Plc. The Motley Fool UK has recommended Primary Health Properties Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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