- Money
The Government announced in the Budget that the annual adult cash Isa subscription limit will be reduced to £12,000 from April 2027.
Vicky ShawWednesday 03 December 2025 10:40 GMT
Savings growth has moderated but remains strong by historic standards, UK Finance said (Dominic Lipinski/PA) (PA Archive)
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Households held £207 billion in cash Isas at the end of September, marking a 14% increase on a year earlier, as people continued to build up “precautionary buffers against an uncertain economic backdrop”, according to a banking and finance industry trade association.
Some £295 billion was also held in savings accounts for which notice has to be given, which was a 10% annual rise, UK Finance said.
The figures were released as part of UK Finance’s household finance review for the third quarter of 2025.
UK Finance said that households were saving as a precaution, even as savings rates drifted lower.
The report said: “Household savings are likely to see continued growth through the remainder of the year, although a further downward drift in rates or wage growth could limit this growth somewhat.”
Eric Leenders, managing director of personal finance at UK Finance, said: “Savings growth has moderated but remains strong by historic standards, with households continuing to build precautionary buffers against an uncertain economic backdrop ahead of the autumn Budget.”
Following months of speculation about the cash Isa limit, the Government announced in the Budget that the annual adult cash Isa subscription limit will be reduced to £12,000 from April 2027.
The annual overall contribution limit into adult Isas will remain at £20,000, potentially encouraging some savers who reach the £12,000 cash Isa limit to put more money in stocks and shares. Over-65s will retain the full £20,000 annual cash Isa allowance.
New rules will also be introduced to prevent people getting around the new limit, including charges on interest paid on cash held in stocks and shares Isas and tests to determine whether money is being held in “cash like” accounts.
