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Reeves to Cap Cash ISA Allowance Below £20,000 to Channel Savings Into Equities

She aims to shift savers into stocks and shares ISAs with a cut slated for announcement during her July 15 Mansion House address.

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Overview

  • Chancellor Rachel Reeves confirmed the overall £20,000 ISA limit will stay in place while introducing a separate, lower cap for cash ISAs.
  • Officials say negotiations continue over the precise cash ISA threshold, with City firms lobbying for a cut as deep as £4,000 and building societies warning of harm to risk-averse savers.
  • The reform is designed to encourage more retail investment in UK equities by nudging savers out of cash-focused accounts.
  • Financial experts caution that simply trimming cash ISA allowances may not alter saver behaviour and could undermine emergency and short-term savings strategies.
  • Bank of England data show a record £14 billion flowed into cash ISAs in April as savers rushed to secure the existing limit ahead of the planned announcement.