- Deposits in banks and building societies were up by £5.5 billion in March (source: Money and Credit – March 2026 | Bank of England)
- Cash ISAs played a significant role, up £4.4 billion in the month as the end of the tax year approached
- There was an extra £3 billion deposited in easy-access accounts paying interest, while savers withdrew £1.2 billion from accounts paying no interest and £1.9 billion from fixed-rate accounts
- The average rate on new fixed accounts was 3.76%, up from 3.67% in February – but the average easy-access rate fell from 1.72% to 1.68%
- Mortgage approvals for house purchases hit a four-month high of 63,500 as the average rate on new mortgages fell from 4.1% in February to 4.03% in March
Sarah Coles, head of personal finance at AJ Bell, comments:
“Homebuyers snapped up mortgages in March in an effort to pick up affordable deals before they disappeared. It meant the highest number of approvals for new purchases in four months. Meanwhile, Cash ISAs dominated savings as the end of the tax year approached and savers looked ahead to the reduction of the annual allowance from next April.
“With a rate cut in February, things had been looking good for anyone seeking out a mortgage. However, the outbreak of the Iran war at the end of the month threw a spanner in the works. Would-be buyers decided to snap up affordable mortgages in March before they were repriced.
“We will have to wait and see whether the market proved resilient in the face of more mortgage price volatility in April, or whether this was a brief flurry before a lull. There’s the chance that committed buyers stay the course, but there’s also a risk we’re set for an altogether lumpier outlook.
Rush to Cash ISAs continues
“Cash ISAs were flavour of the month again. They’ve delivered robust numbers ever since the government announced that the days of the higher Cash ISA allowance were numbered for people under 65. Banks competed hard for the money too, so there were rich pickings for those with an allowance to use. We can expect a rise in April, and another bumper year for the Cash ISA, as people fill their boots while they can.
“Elsewhere in the savings market a combination of higher rate expectations and more competition helped fixed rate deals nudge up. Savers withdrew more from these accounts than they added in March, but it may be worth considering whether you could fix a portion of your savings that you won’t need for a period, while there are some strong rates around.
“With inflation looming, it’s vital to consider the role that cash plays in your life. While it’s likely the right home for money over the next five years, for any cash that you don’t expect to need for longer, investing could well be the best course of action. Investments will rise and fall in the short term, but over the longer term have more growth potential than cash savings as they ride out the ups and downs of the markets.”