Each year, UK Savings Week, created and run by the Buildings Societies Association, aims to raise awareness about the benefits of saving and help everyone – no matter their, circumstances, or ambitions.
This year’s theme is SaveYourWay today and thank yourself tomorrow. Whether you’re building a savings pot for life’s unexpected events or planning for a longer-term goal, saving your way today can give your future self something to be grateful for.
Technical Manager /Trainer, TISA
Recent data from the Bank of England shows that UK individuals have an astounding sum of over £306bn saved in accounts that provide absolutely no interest!
Money is often held in current accounts for easy access in an emergency, but does this really offer the best outcome and savings solution for consumers? Especially when there are plenty of easy access Cash Individual Savings Accounts (ISAs) now readily available.
Given the complexity of the ISA regime and the proposed changes to the ISA rules from April 2027, savers might be feeling uncertain and unsure about venturing into a Cash ISA, so ahead of UK Savings Week we caught up with one of the industry’s resident ISAs experts, Mr Dave Beaston himself, on what’s happening in the ISA landscape and why Cash ISAs still remain a firm favourite for UK savers.
Whilst current accounts are a great tool for holding and transferring cash savings, there are a few reasons why they might not be the best solution to keep your surplus funds in (once you’ve taken out all your bills and regular spending). The most obvious being the lack of interest! Most current accounts offer very low or non-existent interest rates, often less than the cost of living, which brings me onto my second point – this could potentially devalue your savings over time.
Finally, these accounts are designed for everyday banking and spending and not for saving – so if you have excess funds sitting in them, it makes it that much easier for you to spend rather than save.
A Cash ISA is a type of savings account that allows you to earn interest on your money without paying any tax on the amount you save. Unlike a normal savings account where income tax may be payable, you won’t pay income tax on the interest you earn inside a Cash ISA.
There are different Cash ISA products and if you are over 18 in the UK, you can typically choose from some kind of Easy Access ISA account (where you can withdraw money freely, but the interest rate may change); or a Fixed Rate ISA account (where your interest rate stays the same until the end of the fixed rate period and where there will be penalties if you withdraw any funds before the end of the fixed rate period); or finally there is a Notice Cash ISA, which sits between the two: withdrawals usually require notice, which might suit someone who wants some structure around accessing their money.
It’s also worth noting, money that is sat in a Cash ISA is currently protected up to £120,000 by the Financial Services Compensation Scheme (FSCS).
Currently, people have a yearly allowance to put up to £20,000 into ISAs (Cash and other types of ISAs).
At the Autumn Budget 2025, it was announced that from April 2027, the Cash ISA allowance would be reduced to £12,000 while the limit for Stocks and Shares and Innovative Finances ISAs (non-Cash ISAs) would remain at £20,000. The Cash ISA allowance for those aged 65 and over would remain at £20,000. So, just to confirm, the wider allowance isn’t changing, it’s just the amount you can save in Cash ISAs.
TISA members can access our latest bulletin on ISA regulations here:
Cash ISAs remain one of the most reliable and tax efficient savings products – in the 2024/25 tax year, over 10 million people paid into a Cash ISA*. Maximising your cash limit should not be overlooked to enable you to save your way now and benefit future you. The overall limit remains and whilst you may choose to diversify your ISA products to make use of the full limit, cash will always have its place and role for UK consumers.
Weigh up your savings options and how these align with your personal savings goals – saving for a rainy day – perhaps easy access is better suited for you. Saving for a special holiday or home improvements? Perhaps a Fixed Rate ISA would help support you reaching your goal.
UK Savings Week is about building your understanding and appreciation for what is available in the savings landscape and how that meets your personal needs. When it comes to Cash ISAs – they will always remain one of the most valuable savings products around.
And whichever savings mechanism you choose, whether you’re building a rainy-day fund, planning a special trip, or preparing for life’s surprises, saving your way today will give future you something to be grateful for.
Finally, it is also important to mention that investing (in a Stocks & Shares ISA) may be the most appropriate option for some individuals depending on their attitude to risk, especially if they are considering saving over the medium to longer term. Although there are no guarantees, historical returns from Stocks & Shares ISAs over the medium and longer term typically exceed those from Cash ISAs.
Please note: the information provided is for informational purposes only and should NOT be considered financial advice.
*Source: HMRC
