Britain quietly became a nation of ISA obsessives – and a £12,000 cap could ruin the party
In a country where saving has long been a national pastime, the humble Individual Savings Account (ISA) has quietly transformed into something of an obsession.
New analysis from Lloyds Banking Group shows that the total value of ISA savings and investments across the UK is on track to surpass £1 trillion by the end of the current tax year (2025/26).
That’s a staggering milestone, driven by record inflows expected to top £115 billion this year alone – with £85 billion pouring into cash ISAs as savers rush to maximise their allowances.
Lloyds, drawing on data from HMRC and the Bank of England, predicts this surge will push the overall ISA pot over the £1 trillion mark, combining cash holdings (forecast to exceed £450 billion) with stocks and shares ISAs (likely topping £600 billion).
Cash ISAs remain the darling of the masses, with net inflows up 20% and average balances climbing to over £9,500. Subscriptions could reach nearly 18 million this year, including as many as 12.5 million cash accounts.
“Savers have rushed to make the most of the £20,000 allowance, with annual deposits more than doubling between the 2021/22 and 2023/24 tax years. We expect some of that trend to continue and that we’ll see a record year, pushing the total value of all ISA savings beyond £1 trillion,” said Simon Caddick, Savings Director at Lloyds.
Imminent disruption
This golden era of unrestricted ISA enthusiasm now faces a sharp disruption.
As announced in the Autumn Budget 2025, from 6 April 2027, the annual contribution limit for cash ISAs will be capped at £12,000 for those under 65.
The overall ISA allowance remains £20,000, meaning up to £8,000 can still go into stocks and shares ISAs (or other types), but the cash option, long the default choice for millions, will be curtailed.
The government argues the change will encourage more money into productive investments, boosting the UK economy rather than sitting in low-risk savings accounts.
Over-65s are exempt and can continue using the full £20,000 for cash if preferred. But for younger and middle-aged savers, the shift could force a rethink of long-held habits.
Many who currently max out their £20,000 allowance in cash ISAs, about a quarter of cash subscribers, per estimates, will suddenly find themselves limited.
The rush this year and next reflects anticipation of that squeeze, with savers front-loading contributions to lock in the higher limit while it lasts.
Critics worry the cap could dampen overall saving enthusiasm or push people toward riskier assets they’re not comfortable with.
Stocks and shares ISAs have lagged in popularity compared to cash, and investments can go down as well as up.
