Why did savers put record amounts into cash Isas in 2025?

Savers poured a record £57 billion into cash Isas in 2025 due to speculation that the tax-free allowance would be reduced.

When will the cash Isa allowance be cut for under 65s?

The cash Isa allowance will be cut to £12,000 a year for savers under 65 starting from April 2027.

Will the cash Isa allowance change for savers over 65?

Savers over the age of 65 will still be able to save £20,000 a year tax-free in cash Isas.

Home / Business and Economy / Savers Flock to Cash Isas as Tax-Free Limit Threatened

Savers Flock to Cash Isas as Tax-Free Limit Threatened

31 Jan

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Summary

Record £57 billion poured into cash Isas in 2025.
Allowance cut to £12,000 for under 65s from April 2027.
Rising interest rates drive savers to seek tax shelter.

Savers Flock to Cash Isas as Tax-Free Limit Threatened

Cash Isa inflows reached an unprecedented £57 billion in 2025, marking a decade-high as savers responded to speculation about a potential reduction in the annual £20,000 tax-free allowance.

This surge contrasts sharply with 2022, when £1.1 billion was withdrawn. The shift is attributed to rising interest rates and a decade-long freeze on the Personal Savings Allowance, which now subjects more savers to tax on their earnings.

Official data from the Bank of England confirms December 2025 saw a record £5.2 billion in cash Isa inflows for a non-tax year end month. This trend is expected to continue as the new allowance limit approaches.