See more This is Money on Google - save us as a Preferred SourceBy LEE BOYCE, EDITOR, THIS IS MONEY Updated: 14:00 BST, 2 June 2026
Products featured in this article are independently selected by This is Money's specialist journalists. If you open an account using links which have an asterisk, This is Money will earn an affiliate commission. We do not allow this to affect our editorial independence.A huge £12billion poured into cash Isas in April 2026 as savers rushed to make the most of their tax-free allowances resetting for the 2026/27 financial year.The figure is £2billion less than April 2025 – a record month for Isas – but shows tax-free savings have risen to the top of the list of financial priorities for many.Our analysis of Bank of England data shows that in the 16-month period between January 2025 and April 2026, a mammoth £83.2billion has gone into cash Isas.It comes after a year and a half of uncertainty around the future of cash Isas, with the Chancellor announcing an allowance cut to £12,000 a year from £20,000 in April 2027 for under-65s.For that age group, if they want to utilise the full £20,000 allowance, they'll need to put at least £8,000 into a stocks and shares version - an attempt by Rachel Reeves to coerce them into investing. Tax-free rush: Savers are wising up to the benefits of cash Isas and the current £20,000 a year allowanceAnalysis by Hargreaves Lansdown shows savers withdrew £13.4billion from interest paying accounts, suggesting 'people are actively moving cash out of taxable savings accounts and adding it to their Isa as soon as their allowance becomes available.'This means they are sheltering their savings interest from tax, especially vital for financial planning of higher and additional-rate taxpayers.That's because they are taxed on interest earned over £500 for higher-rate taxpayers via the Personal Savings Allowance, while additional-rate taxpayers have no buffer.And from next April, tax rates on savings interest will rise, payable on anything earned above your PSA - taxed at 22 per cent for basic rate taxpayers; 42 per cent for higher-rate taxpayers, and 47 per cent for additional-rate taxpayers.There are many easy-access cash Isas in our independent savings tables paying more than 4 per centTrading212* is offering 4.76 per cent, Moneybox 4.75 per cent, Plum* 4.6 per cent and Vanquis 4.3 per cent.There are also a number of fixed deals paying plus-4.5 per cent, as providers battle for tax-free money.Bank of England data shows a record £57billion went into cash Isas in 2025, marking the highest inflows in the past decade and the biggest since the Isa allowance rose to £20,000 in 2017.December saw £5.2billion paid into cash Isas – a record for a non-tax year end month.It's a stark contrast to 2022 when savers pulled £1.1billion out of cash Isas as interest rates languished.
