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  • Financial markets, inflation

Click to read the article below and then answer the questions:

Cash Isas remain popular despite the drain of inflation

  • Distinguish between real and nominal earnings. The average earnings chart in the following article may help: UK average earnings start to fall despite labour shortage

  • What is an ISA?

  • ‘At the moment, keeping your money in a cash Isa means it is losing value in real terms at the fastest rate in almost 30 years.’ Explain why this is the case

  • Explain why a stocks and shares Isa may be a more attractive investment opportunity at this time

  • Evaluate whether surging inflation will push savers into riskier investments which potentially offer higher returns

Gavin Clarke, Emmanuel College

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