Are your savings working as hard as they could?

best to put together a balanced portfolio or establish a stocks and shares ISA.

Some are not looking for long term performance but have put the money aside for short term needs – towards buying a house, for example.

Others are still traumatised by the 2007/8 financial crash and how close we came to a total bank collapse.

With consumer debt at crazy levels, the stock market at unsustainable highs in the opinion of pessimists, all the uncertainty of Brexit, the threat of nuclear war over North Korea, there is a worry that it could all happen again.

For many, though, the issue is much more basic.

It is simply a case of inertia and the perceived complications and paperwork involved in setting such things up.

In fact, moving your money between cash ISAs and stocks and shares ISAs is relatively easy these days.

Each tax year, you get an ISA allowance which sets the maximum you can save within the tax-free wrapper from April to April.

The previous ISA system used to limit how much you could put into each pot – you’d get half your allowance in cash and half in shares, or you could choose to put it all in cash or all in shares.

In July 2015, however, the rules were almost completely relaxed.

Although the amount you can save annually is limited – currently £20,000 – you now get to choose whether you want to split this between stocks & shares ISAs, cash ISAs, innovative finance ISAs, Help to Buy ISAs and the new Lifetime ISA.

Placing investments inside an ISA wrapper provides important tax advantages.

You don’t have to pay capital gains tax on profits made from share price increases.

There is no tax on interest earned on bonds. And there is no tax on dividend income.

Cash has a place in everyone’s portfolio, but it should form part of that portfolio, not dominate it.

There is certainly more risk involved in investing in equities but almost as much or as little as you want.

The cautious investor can opt for blue chip stocks, solid companies with solid track records.

And at the other end of the spectrum there are so-called penny shares which could make you a fortune but are probably more likely to blow up in your face.

That is why a balanced portfolio is so crucial – independent financial advisers can guide your decisionmaking.

Yes, markets can be volatile but at least equities offer the potential for positive long-term returns and protection against inflation.

As Woodford Investment Management, led by the legendary Neil Woodford, noted recently: “The money invested in cash ISAs remains tax-free, but these days, it is also pretty much return-free!

“The perception of equities as a ‘risky’ asset class depends hugely on your definition of risk and your investment time horizons. Some people’s savings are potentially not working as hard for them as they could.” Trevor Law is managing director of Merito Financial Services, chartered financial planners, based in Solihull. Email:tilaw@meritofs.com