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Are Cash ISAs worth it?

Alex Sitaras, Head of Savings and Partnership Products
16 May 2025

Important? Yes. Boring? Also yes. It’s widely accepted that saving money for the future is a good idea. But there’s always something more interesting to do than focus on whether you’re putting enough money away, what interest rate you’re getting, or if you’re paying too much in tax.

I get it. Even from speaking in my role as Head of Savings and Partnership Products for Skipton Building Society. It’s my job to develop rewarding savings accounts for our members, taking into account the wider economic backdrop. Don’t fall off your chair in shock – I’m a huge believer in the power of saving. But even I’m happy to admit it isn’t the most exciting topic in the world to spend time considering.

It's why I’m not surprised about research we’ve conducted in March 2025 that found one in four Brits know more about pop culture than the details of their own savings accounts. 39% could more easily name the Premier League top scorer than how their savings are performing. 22% are more comfortable listing Taylor Swift albums, or recalling actors who’ve recently played Doctor Who, than how much money they’ve put away.

It all adds up to 44% of adults admitting they’re in need of getting on top of their finances. 33% of this group have no idea if they’re getting good interest rates on their savings. 20% have multiple accounts they’re struggling to keep track of.

I’m no Swiftie myself, but I’d definitely urge you to ‘shake it off’ (your savings that is) and have a look at your saving plans. It’s not as thrilling as an episode of The Traitors (19% can name the winner of the last series, but not how their savings are doing), but it might set you up for a better chance of achieving your goals.

What are the benefits of ISAs?   

What’s an especially big opportunity for you right now is ISAs. According to March 2025 research by The Investment Association and Opinium, less than one in three UK adults have a Cash ISA.

If you have savings that aren’t in a Cash ISA, you could be missing out on valuable opportunities to get your savings working harder. Opportunities that might not be around forever.

  • The government has confirmed it is looking at options to reform the Cash ISA rules, with recent speculation suggesting changes to the Cash ISA allowance.  
  • This comes at a time when income tax limits are staying the same. Over the coming years millions of people in England, Wales and Northern Ireland are likely to start paying tax or move into a higher tax bracket.
  • Meanwhile, Bank of England base rate is slowly coming down. Good news for mortgage borrowers, not such good news for savers.

We haven’t even spoken about how the high cost of living frustratingly goes on. It all builds a situation where our income isn’t going as far it used to, and it’s trickier to save. And all the signs are that this situation is going to get even harder.

Which is why the power of a Cash ISA could make a real difference.

How much can I save in an ISA?  

For the moment, the answer to that is £20,000. The government has maintained this annual ISA allowance on Cash ISAs for at least the 2025/26 tax year. We wait to see what it will do beyond that. But the thinking is that cutting the Cash ISA allowance might encourage more people to invest in a Stocks and Shares ISA.

We’ll get to that later. Right now, it’s definitely worth thinking how your ISA allowance could support your savings goals. Our research found 52% of UK adults say their savings are the area in most need of a review. A Cash ISA is a great way to start.

  • There is no income or capital gains tax to pay on the interest or returns your savings earn inside an ISA. In other words, you keep more of what you save.
  • There are different types of Cash ISAs to suit different goals.
  • ISA rules have recently changed to be more flexible. This includes transferring existing ISA balances to take advantage of better rates.

The choice of Cash ISAs means there is something for everyone. For example, if you’re saving for a short-term goal like your next holiday, an easy access Cash ISA allows you to make flexible withdrawals. If your goal is a bit further off and you don’t need to access your savings in the meantime, a fixed rate Cash ISA could offer you a higher interest rate.

There’s also your longer-term financial objectives to think about. This is where a Stock and Shares ISA could be something to consider. As the name suggests, it means investing your money. That does come with risk, but offers you the potential to achieve higher returns. Something that could be especially important right now.

What about transferring ISA balances?

It can be tempting to think that setting up a Cash ISA is job done. But as time passes, better deals might become available (especially as the initial interest rate of your ISA might not stay the same forever).

Our research found 25% of people who do have a Cash ISA have never moved their money to another ISA to earn more interest. 32% of this group don’t realise they can transfer their ISA savings.

To set the record straight – you can. And even better, it doesn’t have to count towards your annual ISA allowance. So if, for example, you’ve got £50,000 saved in a Cash ISA from previous tax years and want to find a better rate for it, you can move it to another Cash ISA provider – and still save or invest up to £20,000 new money for this tax year. Please note, transfer charges might apply, so it’s a good idea to check with your provider.

23% of adults with Cash ISA savings they’ve never moved believe it wouldn’t make much of a difference to switch it. Maybe that’s true. But it’s your money, and your financial goals at stake.

Isn’t it worth at least finding out?

A swift way to feel better about your financial future

It’s simple. In my view, there isn’t anyone who can’t benefit from a Cash ISA as part of their financial arrangements. So if you’re feeling unsure about your savings plans, let’s look at what we could do to help you.

Stocks & Shares ISAs aren't like bank and building society savings accounts as your money is at risk and you may get back less than you invested.

The tax treatment of savings and investments depends on personal circumstances. Tax rules may change in the future.

You can’t put a price on good advice. So we didn’t.

At Skipton Building Society we believe in fairness, so we offer everyone free money advice to help their money work harder.

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