A consumer group has warned that from next year savers could fall foul of an equity ISA cash trap.
Around £135.7bn was subscribed to adult ISAs in 2024 to 2025, an increase of £32.7bn compared to 2023 / 2024 - with Stocks and Shares ISA subscriptions increasing by 20% to £31.3bn.
Savers chipped in £4.6bn into cash ISAs in February as deposits with banks and building societies increased by £5.8bn, according to the latest Bank of England money and credit data released today.
The number of savers maximising funding of their Cash ISAs in the 2022/23 tax year was the highest in the previous five tax years at 1.46m.
The average stocks & shares ISA fund has enjoyed growth of 11.22% over the past 12 months, more than three times the average return offered by a cash ISA.
Cash ISAs had a record year in 2025, with £57bn of money paid into the accounts, according to the latest Bank of England Money and Credit figures.
Savers put £5.1bn into cash ISAs in November, following Budget concerns about the future of the annual allowance.
In the Budget today Rachel Reeves announced that the amount of cash savings under-65s can put into cash ISAs will be capped at £12,000 from April 2027, with the rest of the £20,000 allowance reserved for investments.
Cash ISA deposits have climbed £2.2bn in the last year, according to the latest Bank of England Money and Credit data.
The cash ISA allowance is looking unlikely to be cut next week, despite rumours circulating that Rachel Reeves could announce the move in her Mansion House speech on Tuesday 15 July.
Chartered financial adviser The Private Office has warned the Government against cutting the Cash ISA allowance, saying that doing so will fail to drive more risk-based investing.
The government could cut the cash ISA allowance to encourage more people to put money into stocks and shares ISAs to boost investment, it suggested today.
