Cash Isa cut 'could lead to mortgage costs rising'

Cutting the annual cash Isa allowance will not encourage most savers to move money into stocks and shares and could mean more expensive mortgages, a committee of MPs has warned the chancellor.

- Hilary Osborne

Each year adults in Britain can put up to £20,000 in a tax-free Isa and can spread the money between traditional cash savings and stockmarket investments as they choose. In the 2023/24 tax year 66% of all contributions were put into cash savings.

In July, Rachel Reeves paused plans to limit the sums that can be paid into cash Isas, but there has been renewed speculation that it could be reduced to £10,000 in next month’s budget in an attempt to promote growth.