The tax-free allowance attached to ISAs will be reduced from £20,000 to £12,000 in changes introduced by the Labour Government
Savers are flocking to "valuable" ISAs to protect their hard-earned cash from HM Revenue and Customs (HMRC) ahead of a looming tax raid from the Labour Government.
The Bank of England's latest Money and Credit figures for June 2026 reveal that savers deposited £2billion into cash ISAs, which is the weakest monthly total in over 18 months.
Total deposits across banks and building societies climbed by £6.3billion during the month, AJ Bell cited in its analysis of the central bank's figures.
Sarah Coles, head of personal finance at AJ Bell, said: "Savers are taking a bit of a breather from the dash for cash ISAs, as life got in the way of our savings plans. They still put in £2billion but that's their lowest for more than 18 months."
The data also showed £1.3billion flowing out of easy-access accounts that pay interest, while £400million went into accounts offering no interest at all.
This slowdown follows a period of intense cash ISA activity triggered by the Government's announcement that the personal savings allowance for under-65s would be cut and tax on savings interest raised from April 2027.
Between that announcement and the end of April 2026, an additional £8billion was channelled into cash ISAs compared with the equivalent period a year prior.
June's £2 billion compares unfavourably with £3.6billion deposited in the same month a year ago and £3.4billion the year before that.
Ms Coles added: " There was always going to be a lull between the panic induced by the initial announcement, and the surge we can expect as the final deadline approaches, because life will always get in the way and people will always be motivated by a deadline."
Mortgage approvals for house purchases edged up from 56,600 in May to 58,200 in June, though this remained well short of the six-month average of 61,400. The modest improvement did little to dispel a sense of sluggishness in the housing market.
The average rate on newly agreed mortgages climbed from 4.22 per cent in May to 4.35 per cent in June, adding to affordability pressures for prospective buyers.
According to Ms Coles, approvals have "rose slightly [over the period], but remained pretty sluggish, as higher rates took a toll."
Fixed-rate savings accounts attracted £1.6billion in fresh deposits during June, as savers continued to favour locking in returns.
The average rate on new fixed accounts ticked up to 4.3 per cent, from 4.26 per cent the previous month, while easy-access rates held steady at 1.65 per cent.
Ms Coles highlighted that fierce competition among providers has kept fixed rates attractive, with the best three-year deals recently pushing back above five per cent.
However, she cautioned ethat the outlook remained uncertain given unpredictable geopolitical developments, advising savers to act while competitive deals are still available.
