With government plans to overhaul the ISA system from next April, reducing the current £20,000 savings threshold to £12,000 for cash only ISAs, latest figures from HMRC show that threats of change to the popular savings vehicles triggered a multibillion pound savings splurge in tax year 2024-25.

The stand out figure was a 37.5% increase in the amount of money put into Cash ISAs totalling £95.9bn in just 12 months, up £26.1bn on the previous year.

In total £135.7bn was saved in ISAs in 2024-25, including a 19.7% increase in stocks and shares ISAs. The overall figure was up £32.7bn, with more than two thirds driven by money being shovelled into cash ISAs.

Former chancellor Rachel Reeves overhauled ISA savings, with plans to shift the public towards stocks and shares ISAs, splitting the old £20,000 allowance 50/50 between cash and stocks. The stocks and shares option also comes with extra complexity, with the implications of ‘unused cash’ held in these ISAs liable for income tax at 22%.

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