Will She Won't She Change the Cash ISA Allowances Next Budget

5th July 2025

The Chancellor Rachel Reeves has confirmed she will preserve the overall £20,000 annual ISA allowance but is actively considering reform to how much of that can be held in cash to nudge savers into markets.

Industry reports suggest Reeves may ring-fence a portion of the £20,000 limit for stocks and shares ISAs, reducing the cash-only allowance.

Reaction from Providers, Experts and Mad Hatters
Building societies warn cutting cash ISAs would reduce their funding base, pushing up mortgage costs and hitting lower-income savers hardest.

Martin Lewis and consumer groups argue it risks alienating cautious savers without actually prompting investment, calling for better financial education instead of coercion.

Wealth managers urge calm, noting any new limit would likely apply only from the next tax year and not to existing holdings.

Timing and Implementation
Changes are expected in the Autumn Budget or Mansion House speech on 15 July 2025.

New rules usually take effect from the following tax year (6 April 2026), ensuring no retrospective claw-back of current ISA balances.

What Savers Can Do Now
Consider using as much of your 2024/25 cash ISA allowance as you need before any cap is introduced.

Shop around for the most competitive cash ISA rates, since cutting the allowance won't change current product terms.

Explore Stocks & Shares ISAs or "cash-like" funds inside investment wrappers to maintain flexibility and tax-efficient returns.

"Would you tell me, please, which way I ought to go from here?" said Alice.
"That depends a good deal on where you want to get to," said the Cat.

"I don't much care where--" said Alice

Don't be like Alice - Do something.

Curiouser and curiouser.