British savers moved billions of pounds into cash ISAs in a late-2025 rush, seeking to secure their tax-free savings ahead of a confirmed reduction in the annual allowance. New data from the Bank of England reveals a significant spike in deposits as households acted on pre-Budget warnings.
A Surge in Savings Ahead of Change
According to the latest figures, UK households deposited £5.1 billion into cash ISAs during November 2025. This represents a sharp increase from the £3.3 billion placed into these accounts in the same month the previous year. Notably, this November inflow was the highest seen throughout 2025, apart from the typical end-of-tax-year surge in April.
The driving force behind this activity was the Labour Party's Autumn Budget. While households placed a total of £8.1 billion into all types of cash accounts in November, the focus was squarely on ISAs due to impending rule changes. The Budget confirmed that from April 2027, the annual cash ISA allowance will be reduced to £12,000 for individuals under the age of 65. Those aged 65 and above will retain the current £20,000 limit.
Expert Analysis: "Savers Showed Their Passion"
Financial analysts have interpreted the data as a direct response to the political and fiscal landscape. Sarah Coles, head of personal finance at Hargreaves Lansdown, stated, "Savers showed their passion for cash ISAs in November, as concerns about the future of the annual allowance drove £5.1 billion into them."
Laith Khalaf, head of investment analysis at AJ Bell, provided further context. "Cash ISA deposits were elevated in November, no doubt because there were plenty of rumours ahead of the Budget that the Cash ISA allowance was set to be cut," he said. He noted that while the scale of saving was significant, it did not reach the levels seen ahead of the 2024 Budget, suggesting taxpayers may be becoming "a bit more jaded" by repeated warnings of tax rises.
The Broader Savings Landscape and Future Outlook
Khalaf also highlighted the enduring appeal of cash to UK households, despite low interest rates on many accounts. "The familiarity and convenience of cash, along with its safety, in nominal terms, still make it a cultural compulsion that’s incredibly difficult to rewire," he explained. This is evidenced by the household savings ratio standing at 9.5%, and an estimated £300 billion sitting in accounts paying no interest.
Looking forward, experts suggest that falling interest rates could lead to less saving and more spending or investment. However, the immediate consequence of the Budget announcement is clear: savers have a limited window to act. Individuals still have the current and the next full tax year to utilise the full £20,000 ISA allowance before the new restrictions take effect in April 2027.
The November scramble underscores a proactive, if cautious, approach from UK savers determined to protect their financial buffers from future tax changes.
