Beat the axe and build-up your tax-free savings now

CHANCELLOR Rachel Reeves is rumoured to be plotting to cut the Cash ISA allowance to £4,000, in a drive to encourage savers to invest in Stocks and Shares ISAs instead. But she's picked a poor time to do it.

- By Harvey Jones

Last week was an awful one for the stock market, as investors woke up to the threat posed by US President Donald Trump's mooted trade tariffs.

Anybody checking their pension or Stocks and Shares ISA portfolio will find it notably smaller today than just a week or two ago.

The US stock market has been hit hardest, with the S&P down 5% in the last month alone. Savers who prefer the security of cash may feel even more wary about Reeves's plan to push them into investing.

This will be particularly true for pensioners who rely on a steady stream of interest from their cash savings to top up their state pension

For those who can accept that their capital is at risk, a Stocks and Shares ISA will deliver a superior return to cash over the longer run, but with more volatility along the way.

With the end of the financial year fast approaching, whether you prefer cash or shares you must use your allowance soon or lose it.

DEADLINE

Time is running out, said Alice Haine, personal finance analyst at investment platform Bestinvest by Evelyn Partners. “The tax-free ISA allowance is a golden opportunity to shield your savings and investments from the taxman, but if you don’t use yours by midnight on April 5, it vanishes into thin air.”

She warned: “Once the clock strikes 12, any unused allowance is gone. No rollovers, no extensions, no second chances.”