Average Cash ISAs drop £252 in value over five years

The average Cash ISA holder has seen the value of their pot fall by £252 over the last five years, new research from RateSetter has revealed.

The P2P lending platform suggested this equates to millions of people effectively losing £1 a week in spending power – with inflation outpacing interest rates to erode ISA pots.

In the 2014/15 tax year, RateSetter found that the average Cash ISA subscription was £5,924, with the real value of savers’ money rising modestly over the next 18 months – due to low or even negative inflation.

From summer 2016 onwards, however, the research showed a return to more normal levels of inflation and low interest rates for Cash ISAs had continuously hit the spending power of savers’ ISA pots. The value of an average Cash ISA pot now sits at £6,154, although RateSetter revealed the average value would be £6,406 had they increased in line with inflation.

RateSetter’s research also suggested that many people had responded by turning away from Cash ISAs in recent years – and the lending platform highlighted HMRC figures from 2015 to 2018, which showed the number of Cash ISA accounts fell by approximately 2.5 million, while the money held in Cash ISAs decreased by more than £20bn.

RateSetter CEO, Rhydian Lewis, commented: “Cash ISAs provide certainty on the returns they deliver – but in reality, this simply guarantees that inflation will nibble away at your money faster than it can grow.

“It’s really not surprising that the number of new Cash ISAs opened has dropped, while other options, such as the Innovative Finance ISA – where money invested is put to work in exchange for accepting some risk – are growing in popularity.”

    Share Story:

Recent Stories


FREE E-NEWS SIGN UP

Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.


NEW BUILD IN FOCUS - NEW EPISODE OF THE MORTGAGE INSIDER PODCAST, OUT NOW
Figures from the National House-Building Council saw Q1 2025 register a 36% increase in new homes built across the UK compared with the same period last year, representing a striking development for the first-time buyer market. But with the higher cost of building, ongoing planning challenges and new and changing regulations, how sustainable is this growth? And what does it mean for brokers?

The role of the bridging market and technology usage in the industry
Content editor, Dan McGrath, sat down with chief operating officer at Black & White Bridging, Damien Druce, and head of development finance at Empire Global Finance, Pete Williams, to explore the role of the bridging sector, the role of AI across the industry and how the property market has fared in the Labour Government’s first year in office.


Does the North-South divide still exist in the UK housing market?
What do the most expensive parts of the country reveal about shifting demand? And why is the Manchester housing market now outperforming many southern counterparts?



In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance, to explore how regional trends are redefining the UK housing, mortgage and buy-to-let markets.

The new episode of The Mortgage Insider podcast, out now
Regional housing markets now matter more than ever. While London and the Southeast still tend to dominate the headlines from a house price and affordability perspective, much of the growth in rental yields and buyer demand is coming from other parts of the UK.

In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance.