- Cash ISAs had a record year in 2025, with £57 billion of money paid into the accounts, according to the latest Bank of England Money and Credit figures
- December saw £5.2 billion paid into Cash ISAs – a record for a non-tax year end month
- Budget rumours and decision to cut the Cash ISA allowance from April 2027 prompted the inflows
Laura Suter, director of personal finance at AJ Bell, comments:
“Cash ISAs saw their biggest ever year for inflows, with savers stuffing £57 billion into the accounts in 2025. It marks the highest inflows in the past 10 years and the biggest since the ISA allowance rose to £20,000 in 2017. It’s a stark contrast to just four years ago, in 2022, when there were net outflows from Cash ISAs, as more people took money out of them than paid into them.
“But rising interest rates coupled with a Personal Savings Allowance that has remained unchanged for a decade means that more people are being hit with tax on their savings and seeking the shelter of Cash ISAs. At the same time, because income tax bands have also been frozen, more people are being pushed into the next tax bracket, meaning their Personal Savings Allowance is halved or disappears altogether. All of this means Cash ISAs have become much more attractive to savers.
“For years Cash ISAs were somewhat the forgotten product in the savings market, as the majority of savers didn’t need the tax benefits of the accounts and they often offered lower interest rates than non-ISA savings accounts. But that’s all changed in the past three years, with almost 90% of all the inflows to Cash ISAs in the past decade coming in the last three years alone.
“Speculation about the future of Cash ISAs ahead of last year’s Budget also boosted inflows. There’s no doubt that the rumours around Cash ISAs being cut and the eventual decision to slash the Cash ISA allowance for under 65s in last year’s Budget will have meant more people rushed to use the accounts, despite the fact the cut won’t happen until April 2027. Inflows to Cash ISAs in December 2025 were 47% higher than the same month a year earlier, showing the Reeves effect on the accounts. The £5.2 billion paid into Cash ISAs in December last year is the highest non-tax year end month for inflows ever, closely followed by November’s inflows.
“Cash ISAs’ popularity isn’t likely to go anywhere in 2026, as more people will stuff the accounts before the allowance is cut in 14 months’ time. AJ Bell research from last year found that if the Cash ISA allowance was cut, half of savers would just put their money in a taxable savings account, rather than investing it – running counter to the government’s original aim with its policy. It means lots of savers will be looking to maximise their ISA savings this year to reduce their future tax bill.”
