UK households with cash ISAs scramble to act ahead of rule change(Image: )
UK households placed £8.1bn into cash accounts in November ahead of the 2025 Labour Party Autumn Budget. But savers deposited £5.1billion into cash ISAs during November 2025, according to Bank of England data published this week.
It comes ahead of Budget measures that will reduce the annual cash ISA allowance to £12,000 for those under 65, effective from April 2027. Individuals aged 65 and above will retain the current £20,000 limit.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “Savers showed their passion for cash ISAs in November, as concerns about the future of the annual allowance drove £5.1 billion into them.”
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Laith Khalaf, head of investment analysis at AJ Bell, comments: “It looks like last November’s Budget led to some cash hoarding activity by the public as they sought to build a buffer against tax rises, though the scale was nowhere near what we witnessed ahead of Rachel Reeves’ maiden Budget in 2024.
“Given that Black Friday promotions now seem to start just after Halloween, one wouldn’t expect November to be a particularly thrifty month. Nonetheless households deposited £8.1 billion into cash accounts in November, according to the Bank of England. That was one of the biggest inflows across the year, however it’s some way off the £18.9 billion deposited in bank accounts in October 2024.
“There was no shortage of warnings about tax rises ahead of the latest Budget, but perhaps taxpayers are becoming a bit more jaded and viewing this as business as usual rather than a one-off shock. Or maybe the last Budget’s proximity to the festive period meant that parsimony was somewhat compromised.
“Cash ISA deposits were elevated in November, no doubt because there were plenty of rumours ahead of the Budget that the Cash ISA allowance was set to be cut. That indeed proved to be the case, though the lower allowance won’t come into effect until 2027, and over 65s will be exempted.
“Households placed £5.1 billion into Cash ISAs in November 2025, up from £3.3 billion in the same month the previous year, and the highest inflow across 2025 except for the end of tax year bulge in April. Clearly some savers weren’t taking any risks with their Cash ISA allowance and acted ahead of the Budget, just in case the shutters came down immediately.
“As we enter 2026, cash is still king for many people. The household savings ratio stands at 9.5%, down from its recent peak of 11.3%, but still pretty high. If interest rates continue to fall, we can expect less saving, and more spending and investment. H
“owever, with £300 billion sitting in accounts paying no interest, it’s clear that for some people the rate of return on cash isn’t a particularly important incentive.
“The familiarity and convenience of cash, along with its safety, in nominal terms, still make it a cultural compulsion that’s incredibly difficult to rewire.
“That’s despite the fact that fostering greater investment instead of saving would be better for the UK economy, and for the wealth of those with longer term financial goals.”
Savers still have the current and next tax year to utilise the full £20,000 allowance before restrictions take effect.