Savers rushed to get money into tax-free cash Isas ahead of speculation that the cash Isa allowance would be cut.
In October, £4.2billion flowed into cash Isas, up 75 per cent from the £2.4billion savers deposited in September, data from the Bank of England shows.
The surge in cash Isa deposits was in response to speculation about the £20,000 allowance being cut, industry figures say.
Mark Hicks, head of Hargreaves Lansdown Active Savings, says: ‘October saw even more money pile into cash Isas than September, ahead of expectations of cash Isa cuts in the Budget.’
Chancellor Rachel Reeves announced in her Budget the cash Isa allowance will be slashed to £12,000 a year from April 2027, but only for under 65s.
But 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.
Isa rush: Savers piled £4.6billion into cash Isas spurred on by speculation the Isa allowance would be cut
It means from 6 April 2027, savers under the age of 65 will be able to put a maximum of £12,000 into a cash Isa and if they want to use the whole wrapper, the remainder – £8,000 – can go into stocks and shares.
The amount that can be put in a stocks and shares Isa will remain at £20,000 in each tax year.
Between January and August 2025, cash Isa balances rose by £47billion as savers rused to make use of tax-free accounts, Paragon Bank analysis of Caci data shows.
Isa balances grew from £378.7billion in January 2025 to £425billion in August 2025.
It wasn’t just cash Isas which received a flood of money – there was a dash for cash in standard savings accounts as attractive tax-free Isa rates pushed up competition for ordinary easy-access accounts.
Bank of England data reveals savers piled £5.5billion into standard easy-access accounts in October.
Hargreaves Lansdown reported its savings platform Active Savings attracted £1billion of savings deposits in the space of a month from October and November, with cash Isa inflows up 104 per cent compared to the same period last year.
Mr Hicks says: ‘This client behaviour shows that the speculation about cash Isa limit reduction led people to rush into the product in advance.
‘Even though the proposed Isa changes don’t take effect until 2027, clients are taking action now for fear of missing out on the most loved savings products in the market right now.’
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