British savers subscribed to £135.7bn of adult ISAs in the 2024/25 tax year, up £32.7bn year on year, with cash ISAs accounting for most of the increase, according to new HMRC data.

Cash ISA subscriptions rose 38% from £69.5bn to £95.6bn as the Bank of England (BoE) bank rate and interest swap rates remained at elevated levels. Stocks and shares ISA subscriptions also increased, rising 20% to £31.3bn, while innovative finance ISA subscriptions fell 30.8%.

The number of adult ISA accounts subscribed to rose from around 15 million to 16.8 million, driven partly by an additional 802,000 stocks and shares ISA accounts.

At the end of the 2024/25 tax year, the market value of adult ISA holdings stood at £952bn, up 8.5% year on year. Cash ISA holdings increased 16.7%, compared with a 2.9% rise for stocks and shares ISAs. Cash accounted for 44.1% of total ISA holdings, up from 41%, while stocks and shares ISAs fell from 58.9% to 55.8%.

Commenting on the figures, Winston Ruddick, senior financial planning consultant at Broadstone, said: “Higher interest rates and looming reforms have turbocharged the appeal of Cash ISAs, with savers taking advantage of stronger returns to stash billions more pounds into these accounts.

“The scale of the increase is striking with higher savings rates clearly making cash a far more attractive proposition, while the tax-free wrapper has become increasingly valuable as more savers find their interest income exposed to tax."

From April 2027, the annual Cash ISA limit for under-65s is due to fall to £12,000, while the overall ISA allowance will remain at £20,000. Ruddick said the change could prompt a significant shift in how savers use their allowances, with the latest figures highlighting the scale of the potential transition from cash to investments.

The median ISA holder (by income) had annual income of between £20,001 and £30,000. The average ISA market value of this income group was £34,575, representing a 9.6% increase in comparison to 2022 to 2023.

The figures also revealed that the lowest number of ISA holders was in the youngest category (under 24), but approximately 67.8% of this group were active savers in 2023 to 2024. The greatest number of ISA holders was in the 66 and over group. However, a large portion of this group (52.3%) were not active savers in 2023 to 2024

---