More investors are turning to stocks and shares Isas to try to avoid losing value on their savings because of low interest rates.
Isa subscriptions were up 29% during the 2009-10 tax year to reach £12.5 billion, compared with 2008-09.
Tony Vine-Lott, of the Tax Incentivised Savings Association, says the latest data indicates the "continuing popularity of Isas with the British taxpayer".
He said: "In particular, stocks and shares Isas are proving their value as investors turn to them in an effort to offset the adverse effect of inflation on their cash savings. Clearly people are using Isas for their longer-term needs, possibly as they try to build up nest eggs to supplement their income in retirement."
Cash subscriptions for Isas were also up, for third year in a row, by 7% to an unprecedented £32.5 billion.
Mr Vine-Lott added: "People are saving more nowadays, whether by paying off debt or building up capital in Isas."