British savers moved at unprecedented speed to protect their money ahead of the Autumn Budget, funnelling a record £5.1 billion into Cash ISAs, according to the latest Bank of England data.
A Pre-emptive Rush for Tax Protection
The surge in deposits in late November 2025 came as rumours swirled about potential drastic cuts to the annual Cash ISA subscription limit. Savers acted to use their allowances before any announcement from the Chancellor.
While the confirmed change—reducing the cap to £12,000 for those under 65 from April 2027—was less severe than some feared, it still represents a significant shift. Initial speculation had suggested a potential cut to as low as £4,000.
Ian Futcher, a financial planner at Quilter, commented on the figures: "The rumour mill surrounding the Chancellor's ISA changes seemingly spurred more people to pile money into their savings." He added that the data shows "the impact of Budget uncertainty rather than an overall lack of demand."
Why the Cash ISA Appeal Has Grown
The move towards cash savings within the ISA wrapper has been a marked trend. In the 2023-24 tax year, Cash ISA subscriptions jumped by 67% to £27.9 billion. This vastly outpaced the growth of Stocks & Shares ISAs, which saw an increase of just under 11%.
This trend is driven by two key factors: higher returns on standard savings accounts and the growing importance of tax efficiency. With increases in tax rates on dividends and savings interest, the tax-free benefit of an ISA has become more valuable.
Alice Haine, a personal finance analyst at Bestinvest, explained: "Taking advantage of the tax-free benefits a Cash ISA offers is a no-brainer for those with sizeable savings pots." She highlighted that once savers exceed their Personal Savings Allowance—unchanged since 2016—they face tax on interest at their marginal rate.
Strategic Planning for Savers and Investors
The policy change will particularly disrupt the financial plans of more affluent savers who rely on the tax shield a Cash ISA provides. However, experts point out flexible strategies remain.
"Remember, those that prefer to hold cash can still do so within a Stocks and Shares ISA," noted Ms Haine. "The overall ISA allowance remains at £20,000 and there is no limit on how much of your investment portfolio can be parked in cash awaiting investment."
Many investors already use this tactic, filling their investment ISA with cash to secure their annual allowance and then investing gradually. It is crucial, however, to check the interest rate paid on this cash by the investment platform, as some retain a portion of the interest, though practices have improved following regulatory scrutiny.
The record deposit figure ultimately paints a picture of a savings public acting with temporary caution in the face of political and fiscal change, seeking to lock in current benefits before new rules take effect.
