HMRC has today published its latest annual savings statistics, covering the 2024/25 tax year.
Key findings:
• Adult ISA subscriptions reached £135.7 billion, up £32.7 billion year-on-year.
• £26.1 billion (80%) of the increase came from Cash ISAs.
• Cash ISA subscriptions rose by 37.5% in a single year.
• Cash ISA assets increased by 16.7%.
• Stocks and Shares ISA subscriptions increased by £6.1 billion (19.7%).
• The number of Stocks and Shares ISA accounts rose by 802,000.
Commenting, Isabella Galliers-Pratt, Senior Investment Director at Rathbones, says: “The latest HMRC figures show that cash ISAs remain firmly embedded in the nation's savings habits, buoyed by some of the most attractive savings rates seen in years. At the same time, the rise in Stocks and Shares ISA subscriptions is an encouraging sign that more people are engaging with investing. It may also reflect growing awareness of the value of the ISA wrapper, particularly as tax allowances elsewhere have become less generous.
"Britain isn't necessarily facing a savings problem. Millions of people are actively using ISAs and taking advantage of the tax benefits they offer. The challenge is turning more of those savers into confident long-term investors. While progress is being made, there remains a sizeable group of people who are comfortable saving but remain hesitant about investing.
Can ISA reform change behaviour?
"The upcoming reduction in the Cash ISA allowance from £20,000 to £12,000 for under-65s (in April 2027) could help nudge some savers towards investing, but whether it materially changes behaviour remains to be seen. Cash remains hugely popular, and our research suggests that confidence and understanding, rather than tax incentives alone, are often the biggest barriers to investing.
"More than a quarter of people believe stocks and shares are too risky, while a similar proportion say they lack the know-how to manage investments themselves. Yet almost a third are willing to take higher levels of risk in pursuit of stronger returns. That suggests the issue is often not a lack of appetite, but a lack of understanding.
"If the UK is serious about becoming a nation of investors, the focus cannot simply be on changing ISA rules. Building financial confidence, improving investment education and helping people understand the role investing can play alongside cash savings will be just as important.
Investing for children
"One of the most common conversations we have with clients is about how to give children and grandchildren the best possible financial start in life. Whether it's helping with university costs, a first home or future financial security, many families recognise the value of starting early.
"The rise in Junior ISA subscriptions highlights the importance people place on building wealth for future generations. Children have something most investors would love more of: time. Even modest contributions can grow into meaningful sums when given decades to benefit from compounding, making consistency more important than trying to invest large amounts."
