The number of maximised cash ISAs more than doubled in 2022/23 to 1.46 million, ahead of changes coming into effect for annual contributions, analysis by Murphy Wealth has found.

Figures obtained through a freedom of information (FOI) request showed that this figure was also the highest by a considerable margin in the five previous tax years.

By contrast, the number of people maximising their ISA allowances with stocks and shares fell from 994,000 in 2021/22 to 840,000 during 2022/23.

In 2022/23, nearly 2.5 million people were able to maximise their £20,000 allowance.

The figures come ahead of changes to the cash ISA limit from April 2027, when the amount of cash individuals can contribute will drop to £12,000. The overall limit will remain at the current £20,000 in an effort from the Government to encourage more people to invest their savings, rather than hold cash.

Chief executive at Murphy Wealth, Adrian Murphy, stated: "While the change to the cash ISA limit was only announced in the 2025 Budget, there had been rumours going around for some time.

"There were likely three factors behind the surge in the number of accounts being filled with cash: 2022 was a bad year for stock markets, interest rates rose significantly, and savers wanted to maximise what they could of the cash allowance while it was still available.

"Given savers’ proclivity for saving in cash, this is only likely to have risen again in the time since – particularly in this tax year, which we won’t have the data for until next year.

"Cash subscribed to ISAs in 2023/24 was more than double the amount put in stocks and shares accounts, which suggests the trend continued, even accelerated, since the announcement of the £12,000 limit coming into effect next year."

Murphy Wealth estimated that maximising the new annual ISA allowances of £12,000 for cash and £8,000 for stocks and shares could leave savers £300,000 better off over 25 years than they would have been saving purely in cash.

This assumes a 10.82% return from stocks and shares and 4.3% on cash, which is currently the highest cash ISA rate.

Murphy added: "Everyone should use as much of their allowances as possible – so it is great to see 20% of ISA accounts are being maximised. But using your ISA for cash is a waste.

"They were designed to help people shelter investment gains and income from tax over time, and cash has, for the most part, far underperformed stocks and shares over any reasonable period of time."

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