Allowances reset on Sunday, April 5, 2026
HSBC has issued a new message to customers. New research from the bank has revealed that, while more than half of Britons (54 per cent) are dedicated tax-free savers during ISA season, a significant divide persists in how UK adults are preparing for their future financially.
The bank found nearly two in five (39 per cent) confessed to not having an ISA within their savings or investment portfolio, thereby forfeiting valuable tax-free allowances. HSBC’s nationally representative study of more than 1,000 UK adults revealed a pronounced disparity in ISA uptake across the market.
The research discovered that 44 per cent held a cash ISA, making it the most popular product. Yet, just 21 per cent had a stocks and shares ISA, despite the prospect of superior long-term returns. Meanwhile, 39 per cent held no ISA whatsoever.
Amongst those who did possess ISAs, contribution patterns also exposed a strong preference for cash saving over investing, HSBC noted. The study found nearly half (49 per cent) had contributed solely to a cash ISA in the current tax year.
Only 18 per cent had contributed exclusively to a stocks and shares ISA and merely 12 per cent were contributing to both, demonstrating a narrow approach to diversified saving, according to HSBC.
Despite the £20,000 annual allowance, relatively few savers were maximising it, with just 23 per cent indicating they anticipate using their full ISA allowance this tax year, rising amongst those aged 55 or older. On average, ISA holders estimate they expect to save approximately £11,330, slightly over half of their allowance.
The UK ISA investment gap
HSBC revealed that while ISAs remain a fundamental pillar of UK saving habits, they are predominantly being utilised for cash-based saving rather than long-term wealth accumulation. Cash ISAs continue to attract savers owing to their ease of access, straightforwardness and perceived security, while the reduced uptake of stocks and shares ISAs highlights a persistent investment gap amongst UK adults, with many failing to capitalise on the advantages of a diversified portfolio of savings and investments to build lasting wealth.
Notably, 22 per cent of those surveyed admitted they were unaware that they could hold both a cash ISA and a stocks and shares ISA within the same tax year, suggesting that a lack of financial knowledge is preventing people from making full use of their allowance.
HSBC has boosted the interest rate on its Fixed Rate Cash ISA, now offering what it describes as a market-leading rate of 4.5 per cent, alongside a recently launched ISA incentive for eligible customers, aimed at encouraging both new and existing savers to maximise their ISA allowance ahead of the deadline.
This means customers can not only enjoy tax-free interest, but also receive an additional reward through cashback, at a time when getting the most from their money is a top priority for many households. The tiered reward scheme is calculated on the total sum of new funds deposited throughout the offer period, which spans across the tax year.
Those putting in £20,000 to £49,999 will receive £150 into their HSBC current account, while those depositing £50,000 to £99,999 will pocket £250 into their HSBC current account. Customers depositing £100,000 or more will receive £500 into their HSBC current account.
Lloyd Robson, head of savings at HSBC UK, said: “Our research shows that while nearly half of UK adults are using Cash ISAs, a significant proportion are still missing out entirely on the benefits of tax-free saving. ISAs are one of the most effective tools available to help people build financial resilience, yet the vast majority are either not using them or if they are, not utilising their full allowance.
“That represents a major opportunity for people to take greater control of their financial future. There is also a clear gap between saving and investing. While cash plays an important role, it’s important that people feel supported and confident to consider a broader range of options that could help their money grow over the longer term.”
