Record £57bn flowed into money Isas in 2025 as savers stuffed their tax-free accounts over limit-cut fears

Cash Isas saw their higest ever inflows last year as savers hurried to fill them over speculation the tax-free allowance would be cut from £20,000 a year. 

Savers poured a record £57billion into cash Isas in 2025, official data from the Bank of England shows. 

It marks the highest inflows into cash Isas in the past decade and the biggest since the Isa allowance rose to £20,000 in 2017. 

December saw £5.2billion paid into cash Isas – a record for a non-tax year end month. 

It’s a stark contrast to 2022 when savers pulled £1.1billion out of cash Isas as interest rates languished. 

The majority of savers didn’t need the tax benefits cash Isas provided and the tax-free accounts often offered lower rates than their easy-access savings account counterparts. 

But rising interest rates coupled with a frozen Personal Savings Allowance (PSA) that has remained unchanged for a decade means that more people are being hit with tax on their savings and seeking the shelter of cash Isas.

Laura Suter, director of personal finance at AJ Bell says: ‘That’s all changed in the past three years, with almost 90 per cent of all the inflows to cash Isas in the past decade coming in the last three years.’

In the Autumn Budget, the cash Isa allowance was slashed to £12,000 a year from its current level of £20,000 from April 2027, but only for under 65s.

Savers over the age of 65 will still be able to use the full cash Isa allowance to save £20,000 a year tax-free.

Chancellor Rachel Reeves’ decision to cut the cash Isa allowance was part of a plan to divert billions of pounds sitting in savings accounts into investments. 

But the move to cut the cash Isa allowance, following months of intense speculation, only prompted savers to pour even more money into cash Isas for fear the allowance would be cut. 

In the month leading up to the Budget in November, savers ploughed £5.1billion into cash Isas, compared with £2billion in November 2024.  

Ms Suter says: ‘There’s no doubt that the rumours around cash Isas being cut and the eventual decision to slash the cash Isa allowance for under 65s in last year’s Budget will have meant more people rushed to use the accounts.’

The move to cut the cash Isa came despite warnings from MPs and financial experts that cutting the cash Isa allowance would not trigger people to invest more money in the stockmarket. 

AJ Bell expects more savers will continue to stuff their cash Isas before the allowance is cut in 14 months’ time.

Last year half of savers said if the cash Isa allowance was cut they would put their money in a taxable savings account instead rather than investing it, counter to the Government’s original aim of encouraging more people to invest.