A total £72.2bn was paid into 12.5 million adult ISAs in the 2022/23 financial year, new figures published by HMRC have revealed.

This amount was an increase of £5.2bn compared to 2021/22, while the number of people subscribed to an account was up from 11.8 million.

HMRC’s latest annual savings statistics revealed that for cash ISAs, the most popular type of ISA, the amount paid into accounts rose by 34.7% to £10.7bn, while the number of cash ISAs subscribed to saw an increase of 722,000. As a result, the share of accounts subscribed to in cash has risen to 63.1%, a 2.4% growth from 2021/22.

The amount paid into Lifetime ISAs (LISAs) also saw a significant rise with £700m more paid in than the previous year, equating to a jump of 43.1%.

Senior personal finance analyst at interactive investor, Myron Jobson, said: “The latest data lays bare the seismic shift in savings and investment habits during a period of significant economic upheaval at the height of the unprecedented cost of living crisis. The reprieve in savings rates, following a run of consecutive interest rates hikes, is a key contributing factor to renewed interest in cash ISAs.

“As inflation soared and household budgets tightened, the need to maintain short-term financial resilience also took precedence for many households. This shift is marked by a decrease in subscriptions and amounts paid into stocks and shares ISAs and a corresponding increase in cash ISAs.”

Despite the rising figures across the cash ISA and LISA landscape, the amount paid into stocks and shares ISAs fell £6.2bn in a year to £28bn.

The number of stocks and shares ISA accounts paid into also fell 126,000 to 3.81 million, down by 3% on the previous year.

However, head of personal finance at Hargreaves Lansdown, Sarah Coles, said that stocks and shares ISAs had lost out slightly to cash ISAs, but “not dramatically so”.

“The amount paid into these ISAs was down just 3% and was still up by around a third from five years earlier,” Coles highlighted.

“The enthusiasm for investing that was engendered during the pandemic was still making a difference to the figures. As interest rates look set to fall, we can expect stocks and shares ISAs to make another comeback. At a time when cash ISA rates are dropping below 5%, the superior growth potential of stocks and shares ISAs will come into their own.”

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