Savers moved £4.2 billion into Cash ISAs during October
Coventry Building Society has found that UK households’ recent move to push savings into Cash ISAs has saved them more than £330 million in income tax.
Across October, savers moved £4.2 billion into Cash ISAs in a bid to protect their money ahead of Chancellor Rachel Reeves’ Autumn Budget.
Cumulative cash ISA deposits for 2025 have now reached £45 billion.
READ MORE: Aldi is selling a full Christmas dinner for just £1.50 per person
Jeremy Cox, the head of strategy at Coventry Building Society, said: “Speculation created what felt like a second ISA wave in October, with people pouring more than 60 per cent of savings into tax-free accounts.
“When people think something might disappear, they rush to grab it and that’s exactly what we’ve seen with cash ISAs this year”.
Reeves announced changes to Cash ISAs in the Budget earlier this month, confirming the annual tax-free allowance would be slashed from £20,000 down to £12,000.
The remaining £8,000 was taken away from cash ISAs and moved into Stocks and Shares ISAs in a bid to get people investing in British businesses.
Anyone 65 and over will not be impacted by the changes and will still be able to utilise the full allowance of £20,000 in cash ISAs.
MoneySavingExpert.com, Martin Lewis, said: “The ISA limit is £20,000 and will remain at £20,000 even for under-65s after 2027, which means you can put £20,000 in a shares ISA, you could also choose to put some in cash.
“Let’s say you put £1,000 in cash, well that reduces the amount you can put in shares by £1,000, because it still has the total of £20,000.
“You can do that all the way up from 2027 to £12,000.
“So you could have £12,000 in cash, and £8,000 in shares. You don’t have to put the money in shares.
“You could just, from that point, have £12,000 in cash. The key to this rule is, it only impacts new money paid in.”
Join our dedicated BirminghamLive WhatsApp community for the latest updates sent straight to your phone as they happen.
You can also sign up to our Money Saving Newsletter which is sent out daily via email with all the updates you need to know on the cost of living, including DWP and HMRC changes, benefits, payments, banks, bills and shopping discounts.
Get the top stories in your inbox to browse through at a time that suits you.