- Cash ISAs saw £2.2 billion deposited by households in July (source: Money and Credit – July 2026 | Bank of England)
- £3.5 billion was withdrawn from easy-access accounts paying interest during the month
- The average rate on new fixed accounts was 4.21% in July, down from 4.3% in June – but the average easy-access rate was flat at 1.65%
- Mortgage approvals for house purchases fell, from 58,200 in June to 56,100 in July, below an average of around 60,800 over the previous six months
- The average rate on new mortgages increased from 4.35% in June to 4.45% in July
Sarah Coles, head of personal finance at AJ Bell, comments:
“The summer holidays are always more of a time for spending than for saving, so it’s hardly surprising a significant chunk of cash was withdrawn from easy-access accounts to cover the cost of sun cream and holiday clubs. Meanwhile, weakness is spreading in the mortgage market, as higher rates and lower buyer confidence weighed on purchases.
“Cash ISAs bucked the withdrawal trend. The £2.2 billion paid into these accounts wasn’t a particularly notable sum, and is significantly below the amount paid in during July for the previous two years. However, this isn’t the end of the dash for Cash ISAs. Savers and investors tend to be highly motivated by a deadline, and from April 2027 savers under 65 will see their annual Cash ISA allowance reduced from £20,000 to £12,000. That means we can expect Cash ISA enthusiasm to build again as the summer fades and the end of the tax year gets closer.
“The average rates on fixed deals fell in July, which is striking given the rates on offer right now. If you’re able to tie your money up for a year, you can make 4.9% in the most competitive accounts, and if you don’t need it for three or more years you can get an account paying 5%. Meanwhile the average rate for easy-access accounts was stuck at 1.65%, while the best on the market (excluding those with a bonus that lasts less than a year) offers 4.55%, according to Moneyfacts. It goes to show why it’s so important to look beyond the high street and shop around for a better deal using online banks and cash hubs.
Mortgage approvals lower
“The traditional holiday lull dragged mortgage approvals lower, which doesn’t bode well for the property market in the coming months. It didn’t help that mortgage rates rose during July, as conflict in Iran made for volatile oil prices and fluctuating interest rate expectations. More recently, the quieter property market has meant little change for mortgage rates.
“In a market like this it’s hardly surprising that buyers and sellers may be in no hurry to make a move, so it will be interesting to see whether we get a traditional autumn pick up in activity, or whether the sluggishness that set in during the summer is here to stay. If your plans are on pause, it’s worth using the opportunity to put yourself in the best possible position to buy – whether that’s by topping up a Lifetime ISA for this year or working on your emergency savings.”
