Around £135.7 billion was subscribed to adult ISAs in 2024 to 2025, an increase of £32.7 billion compared to 2023 to 2024, with Stocks and Shares ISA subscriptions increasing by 20% (£6.1 billion) to £31.3 billion. However, the majority of this expansion was driven by the rise in Cash ISA subscriptions, which grew by 38% (£26.1 billion) from £69.5 billion to £95.6 billion with the Bank of England bank rate and the interest swap rates at their highest levels during the 2023/24 and 2024/25 tax years.
Winston Ruddick, Senior Financial Planning Consultant at Broadstone, commented: “Higher interest rates and looming reforms have turbocharged the appeal of Cash ISAs, with savers taking advantage of stronger returns to stash billions more pounds into these accounts. “The scale of the increase is striking with higher savings rates clearly making cash a far more attractive proposition, while the tax-free wrapper has become increasingly valuable as more savers find their interest income exposed to tax.
“However, while cash has an important role to play for emergency savings and shorter-term needs, holding too much in cash over the long term can come at the cost of investment growth. The rise in Stocks and Shares ISA subscriptions is therefore encouraging, but the figures also underline the scale of the behavioural change the Government is seeking to achieve through its reforms.
“From April 2027, the annual Cash ISA limit for under-65s will fall to £12,000, while the overall ISA allowance remains at £20,000, meaning savers wanting to use their full allowance will need to put at least £8,000 into investments rather than cash.
“With almost £96 billion flowing into Cash ISAs in the latest year alone, the new rules could prompt a significant shift in where people put their savings. The challenge will be ensuring that people do not simply stop saving once they reach the new cash limit but instead understand the potential benefits of investing for longer-term goals.”
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