Savers have ploughed a record £18.4 billion into stocks and shares Isas over the last year as the search for decent returns on their pots continues.
Meanwhile, the amount of money being placed in cash Isas fell by 5% year-on-year, with a total of £38.8 billion placed into these savings accounts during the financial year 2013/14, the figures released by HM Revenue and Customs (HMRC) show.
Isas were first introduced as a new tax-free way of saving in April 1999 and they allow money to be held in cash or stocks and shares accounts.
HMRC's figures show that the £18.4 billion newly invested into stocks and shares Isas in 2013/14 represents a 12% jump compared with the previous financial year and is the biggest inflow since the records started in 1999.
The typical amount placed into a cash Isa last year was £3,704, while the average amount put in a stocks and shares Isa was £6,163.
HMRC said that at the end of 2013/14, the market value of adult Isa holdings stood at £470 billion, marking a 6% increase on the value at the end of 2012/13. These holdings are currently split "almost equally" between cash Isas and stocks and shares Isas, it said.
HMRC said there has been " volatility" in the market values of stocks and shares Isas which vary with the performance of the stock market, with values dipping around the end of 2008.
Since the latest figures were compiled, the Government has overhauled the Isa system to create the new "super Isa", which offers savers more flexibility around how they save their money and also allows them to put more money away tax-free.
From July 1, the maximum amount people could place into an Isa per year was raised to a more generous level of £15,000. This amount can be saved into cash, stocks and shares or any combination of the two.
Figures released by the British Bankers' Association (BBA) earlier this week suggest that many people have been hanging on for the new rules to come into force before putting money into a cash Isa this year. The plan for the super Isa was first unveiled in the Budget.
The BBA said the amount of money being put into cash Isas surged by £4.9 billion in July alone, making up more than half of the £8.7 billion flow into cash Isas seen over the first seven months of this year.
Despite the recent fanfare around the new Isa allowance, financial information website Moneyfacts has said the average return on offer on a cash Isa has actually grown worse since the new rules came into place.
On July 1, the typical Isa rate on offer was 1.57%, but it has now fallen to 1.54%. A year ago, the average Isa rate on the market was 1.66%, according to Moneyfacts' figures.
Danny Cox, head of financial planning at financial services firm Hargreaves Lansdown, said: "The combination of low cash Isa rates, improved confidence in the markets and a higher Isa allowance has boosted stocks and shares Isas to a record year of investment.
"It is unsurprising that subscriptions to cash Isa accounts were down given the drop off in interest rates."