Record £14 billion cash Isa injection made by savers in April
Savers injected a record £14 billion into cash Isas as the new tax year got under way, according to Bank of England figures.
An additional £14.0 billion was deposited into cash Isas in April – the highest amount since records started in April 1999.
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.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Telegraph
21 minutes ago
- Telegraph
Labour urged to publish rent reforms impact report as eviction delays soar
Ministers are being urged to publish a report into the impact of rental reforms on the courts as landlords face eight-month delays to repossess their property. Government departments are required to complete a justice impact assessment for any new bills that are likely to impact the UK courts system. Labour's Renters' Reform Bill is set to become law this summer and will include the removal of Section 21 'no-fault evictions'. There are fears the change will force landlords to rely on the courts to regain possession of their properties, adding to existing backlogs. Private landlords faced an eight-month wait from making a claim to the courts to their properties being repossessed in the first four months of 2025, according to the latest government data. Chris Norris, chief policy officer for the National Residential Landlords Association, said: 'The justice system is simply not ready for the impact of the Bill. 'In the interests of transparency, the Government should publish the Justice Impact test. The Government also needs to come clean about how it defines the courts being ready for the reforms. Warm words are no substitute for clear objectives for the justice system.' Justice impact assessments are an internal process and not usually published by government departments, but previous ministers have committed to publishing court reviews ahead of implementing rental reforms. The former Levelling Up, Housing and Communities Committee in a 2023 report said: 'It is not clear whether the Government fully appreciates the extent to which an unreformed courts system could undermine its tenancy reforms.' Furthermore, in a consultation in 2022, the then-government acknowledged that Section 21 was preferred by landlords to other means of eviction – such as Section 8 – as it was perceived as 'quicker and more certain'. Richard Atkinson, president of the Law Society, said of the Renters' Rights Bill: 'The bill will not be effective without further investment in the justice system.' Mr Atkinson also urged the Government to 'provide greater funding and more clarity to the enforcement provisions so that justice is accessible to renters and landlords alike'. In addition to concerns about the justice system, a report has warned impacts of the bill will add almost £900 a year to the average tenancy. The legislation will limit landlords to just one rent increase per year capped at the 'market rate' – the price that would be achieved if the property was newly advertised to let. Landbay said property owners were planning to increase rent by an average of 6pc, which would add £74 to the average monthly rent, or £888 a year. Dr Neil Cobbold, director at property software company Reapit UKI, said: 'The Government's decision not to share the Renters' Rights Bill justice impact test raises serious questions about transparency and accountability. The estimate of changes in the number of court and tribunal cases is a vital tool for understanding how the legislation will affect the property sector – including case volumes – and whether the justice infrastructure is in place to support the change.' The Bill is currently going through the House of Lords before being sent back to the Commons and is expected to receive Royal Assent by summer 2025 and be implemented before the end of the year.
BBC News
25 minutes ago
- BBC News
Trump's trade tariffs 'to hit NI growth and jobs'
A US tariff of 10% on UK goods could cost the Northern Ireland economy £85m and 800 jobs over the next 15 years, a Department for the Economy study has does not mean the economy will shrink in absolute terms, rather it will be smaller than it would have been if the tariffs had not been study only considers the direct effects on Northern Ireland exports rather than any secondary impact would rise to a £110m loss of potential economic output if US President Donald Trump was to impose a 20% tariff on pharmaceuticals. Pharmaceuticals is the part of the Northern Ireland economy which is most exposed to Trump tariffs as almost half of the sector's export sales go to the study suggests a 20% tariff would mean pharmaceutical sector output would be around 5% lower compared to a no tariff are effectively a tax on imported goods and are a major part of Trump's economic policy. Since re-entering office in January, he has raised tariffs on specific items such as steel, aluminium, and cars and imposed a blanket 10% levy on most goods from trading partners around the had briefly targeted some countries' exports with even higher tariff rates, only to suspend those measures for 90 days to allow for talks.A US trade court has ruled that an emergency law invoked by Trump did not give him the unilateral authority to impose the blanket 10% those tariffs are still being collected while the Trump administration appeals the administration is also conducting a national security investigation into pharmaceutical imports, a process which would provide a more solid legal basis to impose tariffs on that sector. 'A significant headwind' The study concludes that tariffs will "adversely affect local businesses and represent a significant headwind for businesses when trying to grow exports over the longer term"."It is also likely that many of the businesses impacted will be in specific geographic areas e.g. Mid Ulster and Armagh, Banbridge and Craigavon council areas," it says."This is due to the importance of the manufacturing and pharmaceutical industries to these areas, which will have implications for the regional balance agenda being taken forward by the department."
The Herald Scotland
25 minutes ago
- The Herald Scotland
Manchester United confident of strengthening squad during transfer window
Total operating costs were down 20.4 per cent compared to the same quarter last year, driven by a reduction in the wage bill due to United's involvement in the Europa League instead of the Champions League, plus the January loan exits of the likes of Marcus Rashford and Antony. The reduction in costs was also attributable to the redundancy programme affecting non-playing staff, which began last year. Marcus Rashford's January loan exit to Aston Villa contributed to a reduced wage bill for the quarter for Manchester United (Martin Rickett/PA) Chief executive Omar Berrada admitted the club's 15th-place finish in the Premier League this season was 'below our standards' and said there was a 'clear expectation of improvement' next season. Changes in personnel seem certain to be required to achieve that and, while United insiders say the club intend to be disciplined about any investment they make this summer in order to remain compliant with the Premier League's profitability and sustainability rules (PSR), the reduction in operating costs alongside a 17.4 per cent increase in revenue does give them room for manoeuvre in the transfer market. The club are close to completing the £62.5m signing of Matheus Cunha from Wolves once his international duty is over and are also understood have a firm interest in Brentford's Bryan Mbeumo, with contact having been initiated with the London club. United posted a pre-tax loss of just under £36m for the nine months of the accounting period to date, significantly down on the loss of £89.2m at the same stage in the prior year. The club posted a pre-tax loss of £130.7m last year, raising concerns they might struggle to comply with PSR, where non-allowable losses must not exceed £105m over a three-year period. Brentford's Bryan Mbeumo is understood to be a player United are firmly interested in (Bradley Collyer/PA) However, the PA news agency understands the accounts of UK-based Red Football Limited are those primarily relied upon by the Premier League and UEFA when determining compliance with their respective financial rules, rather than the results of the plc. The pre-tax loss for Red Football in the year ended June 30, 2024 was £36.25m, over £94m less than the plc's losses. United were found to be compliant with PSR for the most recent assessment period up to June 30, 2024.
