The HMRC figures for 2023–2024 show that subscriptions to cash ISAs have increased by nearly 224% more than stocks and shares ISAs in the decade since 2013–2014.
Source: HMRC.
However, with the 2025 Autumn Budget due at the end of November and ISAs on the Chancellor’s agenda, what does this mean for future savings and investments?
Will the HMRC ISA rules change?
For some time, Chancellor Rachel Reeves has been planning to reform Individual Savings Accounts. It’s widely believed that the current HMRC ISA allowance – the maximum limit of £20,000 per tax year – is going to be reduced for cash ISAs, despite disapproval from the big banks.
The recent statistics from HMRC cast new light on this debate. While stocks and shares ISA subscriptions totalled £31 billion in 2023–2024, cash ISA subscriptions amounted to £69.5 billion, bringing the decade’s total investment in cash ISAs to £360 billion by April 2024.
Assuming this total has now surpassed £400 billion, it would create £16 billion in interest that HMRC isn’t collecting tax on. To the Chancellor, lowering the savings cap on cash ISAs could help to reduce tax loss, as the most recent estimate suggests £9.4 billion was lost in 2024–2025 through untaxed ISAs.
This was up almost 20% from the previous year, after little net inflow for cash ISAs for most of the previous decade when the Bank of England rate was lower and provided worse returns.
It makes sense, then, that the Chancellor would feel justified in changing the rules for cash ISAs – but we will have to wait to see what is announced in the Autumn Budget.
Should you get a cash ISA right now?
Before you rush to set up a cash ISA before the Budget ushers in any changes, you should think carefully about what you want to achieve with your savings deposits.
If you only want to move money to a tax shelter, unless you’re an additional rate taxpayer, the Personal Savings Allowance already covers up to £200 of tax on personal interest.
Or, if you’re aiming to set money aside for long-term growth, there may be better options available.
More details on how ISAs work can be found on the government website, or you can speak to a financial adviser, like one of our Barnsley accountants, to help you explore a range of options.
At gbac, we offer a wide selection of financial services, so we would be happy to discuss tax planning and investment possibilities with you. Simply contact us to talk at a time that suits you.