Record £14 billion cash Isa injection made by savers in April
Commenting on the report, finance experts suggested that speculation over the future of cash Isas, attractive rates, and the tax efficiencies of the accounts prompted savers to pile their money into Isas.
The new tax year starts on April 6 each year, and the period around it is known as 'Isa season' as providers try to attract customers with enticing rates.
In total, households' deposits with banks and building societies increased by £3.0 billion in April, following net deposits of £7.3 billion in March – with Isa deposits being offset by other account withdrawals.
Mark Hicks, head of active savings, Hargreaves Lansdown said: 'Cash Isas dominated the savings market, attracting an eye-watering £14 billion – the highest on record.
'Higher rates and rumbling discussions about the future of the cash Isa pushed tax saving to the top of the to-do list.'
He added: 'The level of withdrawals from easy access savings seems to indicate a significant proportion of Isa savings has come from people withdrawing from savings and ploughing the money into their Isa equivalents at either end of the tax year, to take advantage of the tax saving.
'As competition heated up over tax year end, rates remained elevated, but they have fallen since.'
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, said: 'While uncertainty in the domestic and global economy may have motivated consumers to top up their savings, some may have been taking advantage of higher savings rates while they were still around.'
She continued: 'Worsening real returns on cash savings, once inflation is factored in, will come as a blow for savers, though with increasing numbers of taxpayers being dragged deeper into the tax net as their wages increase – a result of frozen personal tax thresholds – it is the post-tax net return on that cash that delivers the biggest hit.'
Ms Haine said that the personal savings allowance – the amount of tax-free savings that savers can earn – has remained static 'raising the likelihood that those with the best savings rates use up their allowance in full and pay tax on the interest they earn'.
Speculation over any possible future changes to cash Isa limits may also have been a factor, she added.
Ms Haine said: 'While Chancellor Rachel Reeves has confirmed the £20,000 (annual) Isa allowance will remain intact, speculation that she will cap the amount savers can subscribe to a cash Isa is rife, as it feeds into her wider mission to encourage more people to invest their money and contribute to the Government's growth mission.'
Meanwhile, the number of mortgage approvals being made to home buyers fell for the fourth month in a row in April.
Around 60,500 loans for house purchase got the green light in April, which was a fall of 3,100 compared with the previous month.
Stamp duty discounts became less generous for some home buyers from the start of April. Stamp duty applies in England and Northern Ireland.
The Bank also said that approvals for remortgaging (which only capture remortgaging with a different lender) increased by 1,600 to 35,300 in April, following an increase of 1,000 in March.
Richard Donnell, executive director at Zoopla, said: 'A slowdown in demand for mortgages in April reflects the impact of a late Easter.
'We expect mortgage data for May to increase in line with a pick up in new sales being agreed, which are running at their highest level for four years.
'A key factor is also lenders relaxing affordability tests, which is delivering the average home buyer up to 20% more borrowing capacity compared to a few months ago. We expect a busy June as buyers look to secure sales before the summer holidays kick in.'
Figures released by Nationwide Building Society on Monday showed property values increased by 0.5% month-on-month in May, following a 0.6% fall in April, taking the average UK house price to £273,427.
The typical UK house price increased by 3.5% annually in May, compared with 3.4% in April, according to Nationwide's figures.
Banking and finance industry body UK Finance also said on Monday that mortgage completions rose sharply in the first three months of 2025 as both first-time buyers and home movers sought to complete transactions to benefit from lower stamp duty rates before changes took effect on April 1.
For the quarter as a whole, first-time buyer completions jumped by 62% year-on-year and home mover completions increased by 74%, UK Finance said.
The UK Finance report said: 'There were notable peaks in March, with the number of first-time buyer and home mover completions increasing by 113% and 140% respectively compared with March 2024.'
Data from HM Revenue and Customs (HMRC) last week indicated there were 64,680 house sales in April – 64% lower than the total for March – as buyers had rushed to beat the stamp duty deadline.
The Bank of England's Money and Credit report also said that, looking at non-mortgage borrowing, the annual growth rate for consumer credit accelerated to reach 6.7% in April, from 6.2% in March.
Within the total, the annual growth rate for credit card borrowing increased to 9.8% in April, from 8.5% in March.
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