Overview
- Citing Financial Times reporting on Wednesday, multiple outlets say Chancellor John Healey will reverse last year's plan to cut the cash ISA limit to £12,000 in his first Budget.
- The cut was announced by former chancellor Rachel Reeves and was due to take effect in April 2027 as a way to steer household savings into stocks and shares.
- HMRC analysis found the proposed cut would do little to boost the economy but would have a significant operational impact on banks and ISA managers.
- Banks and building societies welcomed the reported U-turn because higher cash ISA flows support their deposit funding, while some investment firms warned the move forgoes a chance to boost long-term equity investment.
- ISAs are tax-free wrappers for cash and investments and remain widely used with about £135.7 billion subscribed to adult ISAs in 2024–25, a fact that shaped both the policy debate and recent consumer behaviour.