Basic-rate taxpayers now have £1,000 in interest they can get from savings accounts and not pay tax on. Higher-rate taxpayers get £500 free from tax. Most financial advisers will suggest you try and save between 3 and 6 months' salary in cash to cope with life's unexpected emergencies that might crop up. The really important thing to be clear on with your savings is what your timeframes are.
If you are saving for something you will need the money for in 2 years, then cash is a no-brainer. Imagine sticking a £30,000 house deposit stash in the stock market, only to have to sell up and take the money out in the middle of a market wobble.
Conversely if you're saving for more than 5 years, having everything in cash makes very little sense. The stock market is likely to do better. Time is on your side and you won't need to be a forced seller.