ISA deposits surge by £3.6 billion in June following reform concerns

Government plans for an ISA overhaul are still on the horizon.

Household deposits rose by £7.8 billion in the month to June, driven mainly by an additional £3.6 billion being placed into ISAs, according to the Bank of England’s latest Money and Credit report.

When taking into account the additional £3.9 billion and £14 billion deposited into ISAs in May and April 2025 respectively, this marks a total of £21.5 billion being placed into tax-efficient savings over the past three months – a £2.2 billion surge compared to the £19.3 billion recorded over the same three-month period in 2024.

“After years of frozen tax allowances and rising interest rates pushing more savers into paying tax we’re seeing a scramble for tax efficiency, and the prospect of that shield shrinking has understandably caused concern,” explained Adam French, Head of News at Moneyfactscompare.co.uk.

Indeed, recent speculation over whether Chancellor of the Exchequer, Rachel Reeves, would slash the Cash ISA allowance undoubtedly had an impact on consumer behaviour over the last month, in what French describes as a “textbook example of policy speculation driving real-world financial decisions”.

While the Chancellor later delayed these plans in July, savers are still left with the uncertainty of whether the allowance could now be reduced. As a result, this may prompt many to continue making the most of the current rules while they still can, which could exacerbate this trend further.

Compare the top ISAs

Even though ISA reform has been put on hold, it’s still worth reviewing your savings to ensure you’re still seeing competitive returns on your money.

Whether you after easy access, fixed-rate or notice ISAs, you can compare the latest rates over on our charts.

Mortgage market continues to recover

Elsewhere, the report also revealed more positive momentum for the mortgage market after stamp duty rises weakened demand at the beginning of April. Net borrowing of debt, for instance, climbed sharply by £3.1 billion to £5.3 billion following a £2.8 billion rise to £2.2 billion in May.

Meanwhile, approvals for house purchasing (not including cancellations) which serves as a marker for future borrowing in the market, observed a 900 bump to 64,200 in June – the second consecutive uplift, albeit by a smaller margin compared to the 2,400 spike in May.

As Ian Futcher, Financial Planner at Quilter, points out, this modest rise “suggests prospective buyers have taken their foot off the pedal ahead of the summer months”, a time when demand is expected to taper off.

Despite hitting its highest point since October 2022, approvals for remortgaging (with a different lender) also saw a more subdued increase, only rising by 200 to reach 41,800. This was a far cry from the 6,200 rush of approvals seen in May.

And yet, Zoopla’s House Price Index (HPI) for July suggests that housing market activity has bucked this trend with buyer demand rising by 11% compared to this time in 2024. This was reportedly fuelled by a record number of homes hitting the market over the past year, though at the same time working to slow house price inflation to 1.3% over the same timeframe.

Nevertheless, if you are in the market for a new mortgage, it could be worth speaking to a mortgage broker to explore all your options and find the best deal for your situation.