1 in 7 people are planning to take advantage of the new cash ISA rules that come into effect next April, research by Yorkshire Building Society shows.

Changes to cash ISAs announced in this year’s Budget will allow savers the freedom to withdraw and replace funds in the same tax year without counting towards their annual ISA limit.

People are saving more with 19% surveyed expected to open up a cash ISA, while 23% plan to increase their deposit amounts. Only 11% of people questioned said they will not take advantage of the new ISA changes.

Savers who are increasing their investments are expected on average to contribute £95 a month, with the majority planning to save into cash ISAs and bank saving accounts.

Peer to peer (P2P) lending will also become part of the tax-free ISA scheme, with 405,000 people already expected to invest. P2P lending investment now totals around £3.5 billion.

Andy Caton, Executive Director at Yorkshire Building Society, said:

“We welcome the new ISA flexibilities, which are likely to prove popular, with many savers recognising the benefits of the new freedoms and looking forward to use them to their advantage.

“A key measure of the success of the reforms will be whether they encourage more people to save and our research indicates that the changes will result in encouraging new savers to begin a tax-free nest egg, as well as incentivising existing ISA savers to put away more.”