Overview

• Chancellor Rachel Reeves is reportedly exploring reducing the annual cash ISA limit from £20,000 to £4,000, following discussions with City executives and fund managers.
• The proposed changes aim to encourage greater investment in the stock market, which has seen declining participation and a slump in UK equity demand in recent years.
• Critics argue that the move would disproportionately impact pensioners and low-income savers who rely on cash ISAs for secure, tax-free savings and liquidity.
• Major savings providers and financial institutions warn that reducing cash ISA tax breaks could undermine funding for mortgages and loans, which depend on cash ISA deposits.
• The Treasury has not confirmed any changes, stating that all savings policies remain under review, but the speculation has sparked significant debate among industry experts and savers.