Investors have until April 5th to take advantage of their annual stocks and shares ISA allowance of £10,200 for the tax year 2010/2011 to shelter cash from the taxman. Many are uncertain over what to do with their investments in the current climate due to inflation and upward pressure on key commodities such as oil, developing national consumption and a move away from ‘risk-on’ trade.

Inflation is at 4.4% yet the average cash ISA account only pays interest at 0.84%, meaning money in a cash ISA is struggling to keep up with inflation. 53% of people regard inflation as the single biggest threat to their wealth over the next 12 months. In comparison, just one in six investors feared tax as the greatest threat, while a further one in seven chose interest rates.

With inflation at such a high, the purchasing power of money will halve in 18 years, leaving many investors with little option to search for yield elsewhere. Investing in stocks and shares ISAs makes it easier for higher rate tax payers to generate an income that beats inflation, and experts predict that on average 15,000 stocks and shares ISAs will be taken out every day before the end of the current tax year, with around 12 million people considering investing in stocks and shares ISAs over the next 12 months.