Overview

• The UK Government has confirmed the annual ISA allowance will remain at £20,000, maintaining its tax-free savings benefit for millions of savers.
• A formal consultation is underway to evaluate proposals, including a potential reduction of the cash ISA limit to £4,000, to encourage investment in equities.
• Chancellor Rachel Reeves clarified she does not intend to lower the overall ISA limit but is exploring reforms to balance cash and equity savings.
• Policymakers aim to boost retail participation in capital markets and support economic growth while addressing inflation and low interest rates.
• Savings experts have proposed doubling the annual ISA allowance to £40,000 to reflect inflation and incentivize diversified investments.