Adult cash ISA balances surged in 2025, increasing by over £57bn across the year, Paragon Bank has found.
Analysis of CACI data for the period between the end of January and end of December 2025 showed that savers moved towards tax-efficient savings ahead of the anticipated reduction in the cash ISA allowance.
Over the period, the average cash ISA account balance increased from £15,919 to £17,225, while the average non-ISA account balance fell marginally from £11,919 to £11,909.
Total adult cash ISA balances rose by £57bn during the period, which Paragon said was driven by strong demand for fixed-term products. Overall, adult cash ISA balances in accounts totalled £426bn across 25 million accounts in December.
Fixed-term ISAs accounts for £35.8bn of the overall uplift, while instant access ISA balances jumped by £22.4bn.
In contrast, non-ISA balances fell by £1.8bn over the same period to £845.6bn across 71 million accounts. Paragon said that was mainly driven by fixed-term non-ISA balances falling as savers reallocated money into tax-efficient wrappers.
Head of savings at Paragon Bank, Andrew Wright, stated: "2025 marked a clear shift in saver behaviour, with many people taking proactive steps to protect their returns by making greater use of tax-efficient savings. Anticipation of changes announced in the Autumn Budget encouraged savers to review where their money was held and to maximise the benefits of cash ISAs while allowances remained unchanged.
"What’s particularly notable is the strength of demand for fixed-term ISA products. Savers were not only responding to potential tax changes but also looking to lock in competitive rates amid expectations that interest rates would begin to fall. This combination of tax planning and rate certainty made fixed-term ISAs especially attractive."
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