The Treasury Committee has warned that Chancellor Rachel Reeves risks “complicating the ISA landscape” with her changes to the Cash ISA announced in the November Budget.

This comes as the Government today published its response to a Treasury Committee report on the Cash ISA, which had suggested that changes to the savings product could add confusion for consumers.

In her Budget last November, the Chancellor announced new plans to change the Cash ISA which included reducing the tax-free allowance from £20,000 to £12,000 for people aged under the age of 65. These plans are due to come into effect on 6 April 2027.

This came despite calls by the Treasury Committee in October that cutting the Cash ISA allowance was unlikely to incentivise people to invest their savings into stocks and shares.

Today, the Economic Secretary to the Treasury, Lucy Rigby, has written that the changes form part of the Government’s plans to encourage people to invest their money so that they can benefit from higher returns and long-term financial resilience.

Rigby cited improving financial literacy in schools as an area currently under review, while also indicating that the Government is working with the Financial Conduct Authority to roll out targeted support for consumers from April 2026.

“This could include supporting people with excess cash savings to consider investing for the first time, such as through opening a stocks and shares ISA,” Rigby wrote. “In addition, financial services firms will provide new, easily navigable ways for people to find the right UK investment for them.”

In response, while chair of the Treasury Committee, Dame Meg Hillier, described the Government’s ambition as “commendable”, she warned the plans might still fail to deliver the “cultural change” as mentioned by the Chancellor at the Budget.

“The Treasury’s ambition is commendable, but I remain to be convinced that these reforms will drive the cultural change that ministers want to see,” Hillier said.

“In her proposed changes, the Chancellor risks complicating the ISA landscape and confusing consumers.

“It is now clear where the Government stands on the issue. The next step is to see how this complex product will be delivered in the real world.”

---