He warned about a worrying trend about the question he is asked by fans
Martin Lewis has offered advice on savings during his BBC podcast. He warned that many people could be missing out on considerably better returns. He discussed the various types of savings accounts and ISAs available to help grow your nest egg.
He drew attention to a “big mistake” that savers commonly make when setting money aside. A new mother wrote in to the programme with a query, as she was keen to purchase investments to build up a pot for her newborn son, so he could access the funds when he reaches 18. She asked the consumer champion which stocks and shares she should opt for within a junior ISA wrapper. ISAs are completely tax-free, with no tax due on any interest earnings or investment growth within an ISA.
A worrying trend
When addressing the question, Mr Lewis first outlined a fundamental principle for savers to bear in mind. He said: “When I look on my website, the vast majority of people who come to my junior ISA page are looking for the top cash junior ISA savings rates.
“When we ask the questions about kids’ savings and investments, the vast majority of questions are about savings, not investments. That worries me.”
The consumer advocate went on to highlight that over time, investments can significantly outperform the interest rate on savings. He said: “On the balance of probabilities, if you invest in a broad spread of assets over the long run, investments are likely to grow significantly faster than savings, many times faster.”
He offered some historical data to illustrate the contrast. Looking at the past decade leading up to the end of 2025, depositing £1,000 into the leading savings account initially and keeping any interest in the account, would have increased your savings by £270. However, merely to match inflation, you would have required earnings of £390.
Mr Lewis compared this with certain tracker funds: had you reinvested any dividends received in a global tracker fund, you would have generated £1,980, while the S&P 500 would have yielded an impressive £3,790.nTherefore, opting for the S&P 500 fund instead of holding your money in cash could have resulted in extra gains of more than £3,500.
No guarantees
Mr Lewis explained: “Of course, past performance is no indicator of future performance. There are no guarantees this would happen again.”
“There are also no guarantees that the S&P 500 would outperform in that period. But I wanted to give you, just a scale of the magnitude of difference of putting money in a broad spread of investments, compared to putting it in savings.”
Addressing the question from the young mother, Mr Lewis said that junior ISAs are “absolutely ripe” for choosing stocks and shares over cash savings, given that you’re inherently setting aside funds for an extended timeframe, so the investments have time to grow.
Mr Lewis has repeatedly advised only depositing funds into investment-based accounts if you won’t need to access the money for at least five years, to allow sufficient time for them to gro. Investment values can fall as well as rise, making it crucial to adopt a long-term perspective, so your investments have time to mature and so you can sell them at the optimal moment.
