Rachel Reeves poised to make major change to cash ISAs

The cash ISA limit could be slashed as part of Chancellor Rachel Reeves’ next budget.

- Vicky Shaw, The Independent

Rachel Reeves

A report in the Financial Times said that Treasury was considering a £10,000 annual cash ISA limit, which is half of what it is currently. Reviving plans for an overhaul of tax-free Isas, the report says, comes as the Government seeks to support an investment culture. It is understood that several potential options are on the table and no decisions have been made. However, a building society has warned that such a move from the government could risk derailing its own housing targets.

More than 14 million people in the UK are thought to have over £10,000 saved in cash, and the government believes some of this could be invested in the stock market to improve people's financial health. The cash ISA limit has been the subject of various rumours in recent months, with speculation previously mounting during the summer. The current annual ISA limit is £20,000, of which all can be put into cash if savers wish. Investments may sometimes outperform cash savings over the longer term, but the value of investments can go down as well as up.