The Stocks and Shares ISA is a terrific way to build wealth. Especially for long-term goals, such as retirement. All your money rolls up free of tax, and withdrawals are tax-free too. No wonder Britons love it.

But there’s one thing we love more, and that’s the Cash ISA. We still put more money into that tax-free savings vehicle than the Stocks and Shares ISA. Cash is fine if you’re saving for a short-term goal, or want an accessible pot of rainy day cash for emergencies. But it’s not such a good idea if it’s going to sit there for years, because over time, equities will make your money work so much harder.

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 can equities do for me?

Financial website Unbiased ran the numbers and found that over the last decade, the average Stocks and Shares ISA delivered a handsome total return of 9.64% a year, including reinvested dividends. By contrast, the average Cash ISA delivered just 1.21%.

That’s a little unfair on the Cash ISA. For much of that period, interest rates were close to zero. Today, it’s possible to get 4%. But that’s still well below the historical return on equities. Also, savings tend to slide over time. You have to keep moving your money, to get a decent return.

Let’s say someone invested £15,000 in the average Stocks and Shares ISA some 10 years ago in August 2016. Today, their money would have grown to £38,885, using that growth figure.

But the real benefits of investing come over the longer run, as share price growth and reinvested dividends have time to compound and grow.

If left invested for another 10 years, until August 2036, that £15k would potentially be worth £100,804. Investors who could leave it for another 10 years (30 in total) could have £261,322 in 2046. Not bad from an initial £15k, although inflation will have eroded its real value.

Check out this brilliant FTSE 100 dividend stock

One FTSE 100 stock with a terrific track record of delivering both share price growth and dividend income is British American Tobacco (LSE: BATS). In January 2000, it shares traded at around 331p. Today they stand at 4,333p. That’s a capital return of 1,200%. But that’s just the start.

During that time, the stock yielded between 4% and 10% a year. Let’s say the average was 6% a year. With dividends reinvested, my rough calculation suggest the total return would be closer to 3,844%. Which would have turned £15,000 into £591,600.

This shows how a top-notch stock can thrash the wider market, but of course, nothing is guaranteed. At The Twelfth Magpie, we recommend building an average portfolio of around 15 different stocks, to spread risk.

Not everybody wants to invest in big tobacco. I don’t myself. British American Tobacco faces challenges too. It has to battle hard to maintain revenues, as smoking rates decline and regulators threaten new income opportunities such as vapes.

Its shares have slowed after a strong recent run, rising just 2.5% in the last year. However, the stock now looks decent value with a trailing price-to-earnings ratio of 12.5. The trailing dividend yield is a juicy 5.55%. Worth considering.

Should you invest £5,000 in British American Tobacco P.l.c. right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if British American Tobacco P.l.c. made the list?

Harvey Jones owns shares in British American Tobacco.