The figures have been published today as part of the Bank of England’s latest Money and Credit Report.

Meanwhile savers paid £8.4bn into banks and building societies in April, the highest figure since September 2022, as they were attracted by higher interest rates on  offer.

As well as ISAs, savers stashed £0.6bn into fixed accounts, and £0.4bn into interest-paying easy access accounts. Meanwhile, they withdrew £1.4bn from non-interest-bearing accounts.

Mark Hicks, head of active savings at Hargreaves Lansdown, said: “At a time when income tax thresholds have been frozen, and savings are delivering as much as 5%, anyone with savings of £20,000 faces a potential tax bill, which has pushed cash ISAs up the agenda for millions of savers, and brought an ISA season bonanza.”

 Among banks and building societies, cash was flowing into savings, and fixed rate accounts were on the up, he said.

Mr Hicks said: “The fact savers can still make 5% or more in fixed accounts, and that rates are widely expected to fall later this year, are persuading more savers that now is the time to lock their cash away and secure a guaranteed rate.”

He said the past few weeks has seen more movement in the yield curve, so while easy access rates have been cut, there are still attractive rates in the fixed-rate market – particularly over shorter terms.

Laith Khalaf, head of investment analysis at AJ Bell, said the figures should give the government pause for thought. He said: “The government is currently trying to address a flagging stock market by pushing for pension funds and investors to put money into UK companies, partly through the proposed launch of the British ISA.

"But it might also do well to reflect on whether the UK’s cash obsession is also holding back the UK stock market, and whether there is anything to be done which would encourage savers to make longer term investments with their money."

He pointed out that the FCA has found that 8.4million consumers had £10,000 or more wholly or predominantly held in cash.

"Figures from HMRC show that 3million people have more than £20,000 held in a cash ISA but haven’t put a dime into a Stocks and Shares ISA. In the tax year ending 2021, 1.6million were lucky enough to be in a position to fill their full £20,000 ISA allowance; 40% of them chose to do so exclusively through a Cash ISA."