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4w ago

UK Savers Rush to Max Out Cash ISAs Ahead of Potential Allowance Cut

Speculation of a drastic reduction in the Cash ISA allowance and anticipated Bank of England interest rate cuts are driving record deposits into fixed-rate accounts.

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Overview

  • The UK Government is considering reducing the annual Cash ISA allowance from £20,000 to as low as £4,000, with confirmation expected in the Autumn Budget for implementation in April 2026.
  • Savers are moving quickly to deposit funds into Cash ISAs, with financial platforms reporting record inflows in April 2025 as individuals aim to secure the current £20,000 tax-free limit.
  • The Bank of England is widely expected to cut interest rates at its May 8 meeting, which could lower Cash ISA interest rates, further fueling the rush to lock in higher fixed-rate deals.
  • Financial experts recommend that savers take advantage of fixed-rate Cash ISAs offering up to 4.5% interest before rates potentially drop, with one- and two-year terms proving particularly popular.
  • Martin Lewis and other financial advisers reassure savers that any reduction in the allowance will not affect funds already held in existing Cash ISAs.