Savers plough over £4 billion into ISAs ahead of Autumn Budget

Fears the Chancellor was looking to cut the cash ISA allowance were realised last week.

Concerns that the Chancellor of the Exchequer, Rachel Reeves, was planning to reduce the amount that can be deposited in cash ISAs each year might have prompted savers to make the most of their current allowance leading up to the Autumn Budget. Households put away £4.2 billion in ISAs throughout October 2025, according to the latest Bank of England Money & Credit report (released today) – almost £1 billion more than the previous month. This brings the total amount saved in cash ISAs so far this tax-year to more than £30 billion.

While the Chancellor confirmed last week that the cash ISA allowance will indeed be lowered to £12,000 in a bid to get more people to invest, this isn’t set to take effect until April 2027 and won’t apply to anyone aged over 65. In the meantime, savers can continue to allocate up to £20,000 per tax-year to cash ISAs should they wish.

“The drive to get the UK investing will not happen overnight and it’s important savers feel comfortable with where they invest their cash,” said Rachel Springall, Finance Expert at Moneyfactscompare.co.uk. Our recent Moneyfacts Savings Trends Index 2025 found that just 23% of consumers kept their money in a stocks and shares ISA compared with almost half (44%) who saved in a cash ISA.

What’s more, there’s a chance the number of savers using cash ISAs could grow after it was also announced in the Budget that income tax bands will remain frozen for an extra three years (until April 2031). Taxpayers who reluctantly find themselves pushed up the ladder due to wage inflation (a process known as fiscal drag) will have their Personal Savings Allowance (PSA) slashed – meaning they can earn less interest from their savings each year before being taxed. Meanwhile, any returns on ISAs are automatically tax-exempt.

Savers champion access to cash

One obstacle that might prevent consumers from investing is a desire to have their cash close to hand – especially during times of economic uncertainty. In October, households added £5.5 billion to interest-bearing sight deposit accounts (such as current accounts and easy access savings accounts), according to the Bank of England, whereas just £0.3 billion was paid into interest-bearing time deposit accounts (also known as fixed savings accounts).

In contrast, it’s often recommended to stay invested for a minimum of five years to allow time for the market to recover from any short-term volatility (although it’s important to note that returns are never guaranteed).

But, while Springall said it’s wise to build an emergency buffer in an account that can be accessed at short notice, she reminded savers who “by default use a current account” that they “could be missing out on inflation-busting returns”. “Not only this, but those who do open an easy access account with their high street bank could be earning a paltry rate, so it’s vital to shop around,” she added.

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