Chancellor expected to cut cash ISA allowance

The Chancellor is expected to announce new plans to cut the cash ISA allowance in her Mansion House speech next month, according to reports.

The Financial Times suggested that Rachel Reeves will consider reducing the annual limit for cash ISAs from £20,000, which is the amount that savers can currently shield from tax.

In an interview with the BBC in May, the Chancellor indicated that the £20,000 ISA allowance would remain in place amid speculation that the Government could reform the way ISAs work. However, she refused to rule out the idea of cutting the cash ISA allowance while retaining the overall £20,000 limit across all types of ISA products, such as stocks and shares ISAs.

In her Spring Statement in March, Reeves held off from making changes to ISAs but indicated that plans to tweak allowances were on the agenda.

Head of personal finance at Moneybox, Brian Byrnes, commented that the ongoing speculation around potential changes to the cash ISA is “causing uncertainty and confusion” for consumers.

“Simply cutting the tax fee allowance on cash ISAs will not necessarily prompt equal inflows into investing products either,” Byrnes added.

“People opt to use cash ISAs over their stocks and shares counterparts for a multitude of reasons, including risk aversion, and reducing the amount of money these savers can put into the cash ISA is unlikely to change this mindset.

“Driving a meaningful cultural shift towards investing requires policies that make investing easier and more attractive to the UK public. If the Government wishes to boost the level of retail investment in the UK, they must do all they can do to provide savers with the tools to build financial confidence and save and invest more.”



Share Story:

Recent Stories


FREE E-NEWS SIGN UP

Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.


Helping the credit challenged get mortgage ready
A rising number of borrowers are finding it harder to access mortgages due to being credit challenged - whether that’s from historic debts, a county court judgment, or having little to no credit history.

In the latest episode of the Mortgage Insider podcast, Phil Spencer is joined by Eloise Hall, Head of National Accounts at Kensington Mortgages, and Alastair Douglas, CEO of TotallyMoney.


Inside the world of high net worth lending
The mortgage market continues to evolve, and so too does the answer to the question: what is a high net worth individual in today’s market? In this episode of the Mortgage Insider podcast, host Phil Spencer is joined by Stephen Moroukian, Head of Product and Proposition for Real Estate Financing at Barclays Private Bank, and Islay Robinson, founder and CEO of Enness Global. Together, they explore what brokers really need to know when supporting high net worth individuals.

The future of the bridging industry and the Autumn Budget
MoneyAge content editor, Dan McGrath, is joined by head of marketing at Black & White Bridging, Matt Horton, to discuss the bridging industry, the impact of the Autumn Budget and what the future holds for the sector.