Safest places to shelter your cash from tax

THE Budget is just days away and despite the steady drip of leaks none of us has a clue what Rachel Reeves will actually do.

- By HARVEY JONES

One idea floated back in February refuses to die though. The Chancellor could slash today's £20,000 Cash ISA allowance, possibly to as little as £4,000, although £10,000 looks more realistic now.

That would be a direct blow for savers who rely on their annual ISA allowance to shelter larger sums from tax, particularly older people who prefer the safety of cash to the rollercoaster of the stock market.

Cutting the Cash ISA will be unpopular, with only 12% supporting the move, while half oppose it, according to research from AJ Bell.

Reeves wants to encourage people to invest in the Stocks and Shares ISA instead, which won't be cut, but the Treasury Committee has warned this is unlikely to work, with savers more likely to put their money into taxable savings accounts. It also warned the move would add complexity.

Savers still have time to protect themselves before any cut comes into force, probably next April, and there are other ways to tuck money away tax-efficiently without huge risk.

There will be plenty of other tax hikes to worry you next week, but this is at least one threat you can combat.

SAVE

Laura Purkess, personal finance expert at Investing Insiders, urged people to act now by using as much of this year's allowance as they can.