Brits are racing to stuff cash into ISAs before the government slashes the allowance
Brits are rushing to maximise their tax-free savings in Individual Savings Accounts (ISAs) as the clock ticks toward major changes to the cash ISA allowance, according to fresh data from the Bank of England and analysis from wealth manager Quilter.
In January 2026, UK households deposited an impressive £5.2 billion into ISAs, part of a broader £4.2 billion increase in total deposits with banks and building societies.
This surge comes amid growing awareness of the government’s plan, announced in the Autumn Budget 2025, to reduce the annual cash ISA contribution limit from £20,000 to £12,000 for those under 65, effective from April 2027.
The overall ISA allowance remains £20,000 per tax year, meaning savers can still allocate the remaining amount to stocks and shares ISAs or other types. However, the cash ISA restriction is widely seen as an effort to nudge more money toward investments in the UK economy rather than low-risk savings accounts.
“Households are continuing to plough money into savings where they can, and the combination of the end of the tax year nearing, as well as changes to the cash ISA allowance which will see cash ISA savings limited to £12,000 per year for under 65s from April 2027, appear to have driven a renewed interest in ISAs,” said Ian Futcher, a financial planner at Quilter.
The current 2025/26 tax year ends on April 5, 2026, giving savers one final full window to contribute up to £20,000 tax-free to cash ISAs before the cap kicks in for new contributions the following year.
Existing cash ISA balances accumulated before the change won’t be affected; only future contributions face the limit.
Over-65s remain exempt from the cash ISA cap, retaining the full £20,000 limit for cash savings. The government has framed the reform as a way to encourage higher-return investments, though critics argue it may simply push savers toward alternatives like Premium Bonds rather than equities.
