Last week it was reported that Chancellor of the Exchequer Rachel Reeves will not make changes to Cash ISA allowances at the Spring Statement on Wednesday 26 March.
It means a review is now more likely to be in the next tax year, providing some certainty until 5 April.
With 2024 a record year for Cash ISAs, many savers can now breathe a sigh of relief to a short-term reprieve from all the speculation.
And for those looking to add money to their Cash ISA before the end of the tax year, you can now make the most of your ISA allowance without any rumours holding you back.
This article isn’t personal advice. If you’re not sure if an action is right for you, ask for advice. Remember, ISA and tax rules can change, and benefits depend on individual circumstances.
Open or top up an HL Cash ISA to shelter your money from tax.
Make cash payments of at least £3,500 and you'll automatically enter our prize draw to win one of two £50,000 cash prizes.
Offer applies to contributions made between 10 February and 5 April 2025. You'll need to keep the qualifying amount in your account until 20 May 2025. Offer ends 5 April 2025. Terms apply.
How to build a Cash ISA portfolio
If you’re looking to save into a Cash ISA this tax year, like investing, building a portfolio is a good idea.
For most people, the answer isn’t to cram everything in easy-access or fixed-rate accounts – a balance of both is more sensible.
Instead of thinking of it as a single pot of money, try looking at it as a savings portfolio, with three parts.
Easy-access savings – for the unexpected expenses
Easy access can be for your emergency fund – this is the amount you should have to cover three to six months’ worth of essential spending in case of emergency.
When you’re retired, you should have more like one to three years’ worth.
By using an easy-access account, you can keep your money at your fingertips and can get to it quickly if something unexpected happens.
Fixed-rate savings – plan your future expenses
You also need cash to cover planned expenses over the next five years. However, if you don’t need the money for a certain period, you can tie it up in a fixed-rate account.
Fixed-rate accounts tend to pay more interest, and you can pick from a number of different terms, like six months, a year or even five years. Mixing and matching means you can make your money work harder and plan when you have cash coming back.
This way you’re guaranteed to get that rate for the full period and have an element of certainty of when you’re getting your money back.
Fixed rates also tend to pay more than easy access but just remember, you can’t usually access your money until they end.
Don’t need your money soon? – Consider a Stocks and Shares ISA
If you don’t need the money within the next five years, you should think about investing in the stock market through a Stocks and Shares ISA.
This approach is generally better if you’re investing for the longer term (at least five years). That’s because the longer you invest, the greater the chance that your money will outperform cash.
You can put money into a Stocks and Shares ISA and use it to buy shares, funds and other types of investments, with the potential to get better returns than you might from a Cash ISA.
Remember though, unlike cash, investments can rise and fall in value, so you could get back less than you invest. And to withdraw from a Stocks and Shares ISA, you’ll need to sell your investments first.
How to get your savings portfolio working harder
Once you’ve chosen from easy access or fixed rate, the next stage is choosing your provider.
But don’t just settle for an account with your usual bank, especially if it’s offering a poor rate.
It’s worth shopping around for decent rates from whoever is offering them.
Here’s where the HL Cash ISA can help.
You can manage your Cash ISA portfolio with multiple banks all on a single online platform – so you can see everything in one place. It also lets you spread your money across fixed-rate, easy-access, and limited-access products.
You can then manage it alongside your savings and investment accounts, all through one log in.
FSCS protection also applies to Cash ISA products, so unless you’re putting more than £85,000 with one provider across all your accounts, your money is guaranteed.
Products in the HL Cash ISA can be added or withdrawn at any time.
This website is issued by Hargreaves Lansdown Asset Management Limited (company number 1896481), which is authorised and regulated by the Financial Conduct Authority with firm reference 115248.
The Active Savings service is provided by Hargreaves Lansdown Savings Limited (company number 8355960). Hargreaves Lansdown Savings Limited is authorised and regulated by the Financial Conduct Authority (firm reference number 915119). Hargreaves Lansdown Savings Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 with firm reference 901007 for the issuing of electronic money. Hargreaves Lansdown Asset Management Limited and Hargreaves Lansdown Savings Limited are subsidiaries of Hargreaves Lansdown plc (company number 2122142).
Article image credit: WPA Pool / Pool.