Millennials and Gen Z savers have until Sunday to use their £20,000 ISA allowance, with major changes to cash ISA limits coming from April 2027 reducing the amount to £12,000
Those born since 1981 are being urged to take note as a significant HMRC deadline approaches tomorrow. The average ISA held by a Baby Boomer — broadly defined as those born between 1946 and 1964 — now stands at £56,260, according to new data obtained by Bowmore Wealth Group via a Freedom of Information request to HMRC — nearly five times the £12,010 held by a typical Millennial — those born between 1981 and 1996.
The figures come to light as the current tax year draws to a close on Sunday, April 5, with ISA allowances resetting when the new year begins on Monday. Yet even Baby Boomers’ ISA savings are overshadowed by those of the “Silent Generation,” individuals born before 1946, who boast average ISA investments of £67,950.
One surprising finding, according to experts, was that Generation Z — those born between 1997 and 2012 — had average ISA investments of £8,690, not considerably lower than their Millennial counterparts.
Bowmore noted that this once again raised the frequently debated question of whether Millennials have set aside adequate savings. Many argue that Millennials have found it difficult to accumulate wealth comparable to earlier generations, owing to sluggish wage growth in the wake of the Global Financial Crisis, combined with soaring housing costs.
John Clamp, Chartered Financial Planner at Bowmore Financial Planning, said: “The data highlights a clear generational divide when it comes to ISA savings. While older generations have benefited from decades of compounding and consistent contributions, younger investors appear to be falling behind at a crucial stage in their financial journeys.
“Even relatively small, regular contributions can build significantly over time thanks to the tax advantages ISAs offer. For Millennials and Gen Z, engaging early with long-term saving and investing is key to narrowing this gap and improving financial resilience in the future.”
With regard to ISAs, savers currently benefit from a £20,000 annual allowance. This resets on the first day of the tax year, April 6, and any unused allowance is lost, reports the Mirror.
From April 2027, reforms introduced by Chancellor Rachel Reeves will mean that only £12,000 can be deposited into a cash ISA. While the overall ceiling will remain at £20,000, the remaining £8,000 up to the full £20,000 will need to be placed into a stocks and shares ISA.
For those with a greater appetite for risk, Bowmore advised that investing a portion of their capital into a stocks and shares ISA is worth considering.
Over the longer term, stocks and shares consistently deliver stronger returns than cash savings held in a cash ISA, the firm added.
John said: “The challenge for many investors is balancing short-term uncertainty with long-term opportunity.
“While holding cash can feel safer, it can also limit the growth potential of savings over time, particularly in an inflationary environment.
“For those able to take a longer-term view, introducing investment exposure through an ISA can be a powerful way to build wealth more effectively, especially when combined with regular contributions and a disciplined approach.”








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