HM Revenue and Customs said there were 13m new accounts opened in 2014-15, down from 13.5m the year before.
The figure, the lowest since 2004-05, will be disappointing for the Treasury, which is trying to encourage more people to save.
It comes in spite of an increase in the amount savers can put in to an Isa.
In July last year the maximum subscription amount was increased to £15,000 for both cash and stocks-and-shares Isas.
The current limit is £15,240.
The accounts are free of both Income and Capital Gains Tax.
One reason for the fall may be that savings rates have been so low that being tax-free offers little extra advantage.
Indeed, a typical one year fixed-rate cash Isa offers a 1.75% return, while some one year savings bonds offer as much as 2%.
However Junior Isas, for those under 18, did prove more popular.
In 2014-15 there were 510,000 new accounts opened, up from 432,000 the year before.
Of savings already in Isas, 80% is held in cash, and 20% is in stocks and shares, according to the HM Revenue and Customs.
The average investment is £6,064.

Margaret Slater, who has dementia, was taken to Queen's Medical Centre Nottingham suffering severe hallucinations.
Her family said there appeared to be too many patients for the number of staff with queues of people in the hallways and waiting areas.
In a statement the trust apologised and said there was a "surge" in patients.
Ms Slater was taken to the emergency department on 11 November during a week when the Nottingham University Hospital's Trust missed its admissions target every day.
3,870
emergency patients seen in week beginning 9 November
80.7% admitted to ward within four hours over the week
74.1% admitted within four hours on the Wednesday
95% should be admitted within four hours according to the government
She was assessed by a nurse when she first arrived and then, three hours later, a doctor said she needed to be admitted but it was another eight hours before she was moved to a ward.
Linda Hughes, her daughter, said the staff were "very caring" but there did not appear to be enough of them.
"It was only due to the pressure we were putting on them that she was moved to a ward. In that time she was offered nothing to eat or drink.
"At one stage, we counted about a dozen [patients on trolleys] and more queuing outside in a corridor with paramedics."
In the week beginning 9 November, the hospital had 3,870 emergency admissions with 80.7% treated within four hours. The government target is 95%.
On the Wednesday, when Ms Slater was at QMC, the figure was 74.1%.
Alun Harcombe, divisional director of medicine, said the hospital was fully staffed but there had been a "surge in people attending", leading to longer admissions times.
"We apologise to Ms Slater and her family for the long wait and that she was not offered any food or drink and have reminded our staff of the importance of doing so at regular intervals," he added.

Scotland's animal welfare charity was alerted after the bird was discovered at Kingholm Quay on Monday.
The gull was taken to a vets where it had to be put to sleep due to the extent of its injuries.
Animal rescue officer Tricia Smith said: "An x-ray confirmed the bird had been shot.
"This was a juvenile gull which had been caused a great deal of pain and distress," she said.
"While the bird was found on an industrial estate, there are houses nearby and often children playing.
"It is very concerning that someone has not only used an airgun to cause harm to an animal but done so near a busy residential area."
They asked for anyone with information about the "mindless act of cruelty" to contact them.
Get regular updates from the Borders and Dumfries and Galloway via our south of Scotland live page.
The number of adults taking out Individual Savings Accounts (Isa) has fallen to its lowest level for ten years, according to official figures.
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A hospital has apologised after a 90-year-old woman was left on a trolley for 11 hours without food or water.
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The Scottish SPCA is appealing for information after a young gull was shot near Dumfries.