Savers and investors now hold close to £900billion in their Individual Savings Accounts, data shows.

But a lag in HMRC's reporting of Isa data, with the most recent information being from April 2023, means the amount of money in the tax-free wrapper is likely to have surpassed the £1trillion mark already, AJ Bell says. 

Over £100billion of the £900billion of Isa savings is held in cash Isas by 3million individuals who have £20,000 or more but don't have a stocks and shares Isa, analysis by the stockbroker shows. 

Some of these 3million cash Isa savers have £50,000 or more but don't invest while 4.5million people hold more than £10,000 in cash Isas but nothing in a stocks and shares Isa. 

Most Isa wealth is invested for the long term with more than £500billion kept by investors in stocks and shares Isas. 

Around £511billion is invested in stocks and shares Isas, £360billion in cash Isas and close to £12.5billion is held in Junior Isas. 

The total value of cash and stocks and shares Isas has soared 80 per cent in a decade, the HMRC data shows. 

It means the average Isa account is worth just over £34,000, according to analysis by AJ Bell, although this varies significantly by age.  

Over 65s typically have the most with £64,386 in them. Those aged 55-64 on average have £41,311; 45-54-year-oldshold £25,316; 35-44-year-olds have £14,254; and those aged 25-34 have £10,556.

More than 21million people in the UK hold at least one Isa, according to HMRC's latest figures, meaning around 40 per cent of people use the tax-efficient accounts. 

But those with cash-only Isas are in the crosshairs of the Rachel Reeves. 

In November, the Chancellor announced the Isa allowance would be cut from £20,000 to £12,000 for the cash component for those under 65 from April 2027. 

Investors will still be able to invest £20,000 in stocks and shares Isa.

The move was a bid to encourage those with cash piles larger than £12,000 to invest the remaining £8,000 of the total Isa allowance in the stock market. 

The cash Isa allowance had been under threat since last February when the Chancellor announced she intended to 'get the balance right between saving and investing'. 

AJ Bell says: 'At a conservative estimate, 3million savers with a cash Isa balance over £20,000 and no investments are sitting on at least £101billion in cash Isas. 

'The Government should be focusing efforts on encouraging those people to invest if it wants to promote a healthier long-term investing culture, and help more people unlock the potential to grow their wealth.'