Overview
- The UK Government is considering reducing the annual Cash ISA allowance from £20,000 to as low as £4,000, with confirmation expected in the Autumn Budget for implementation in April 2026.
- Savers are moving quickly to deposit funds into Cash ISAs, with financial platforms reporting record inflows in April 2025 as individuals aim to secure the current £20,000 tax-free limit.
- The Bank of England is widely expected to cut interest rates at its May 8 meeting, which could lower Cash ISA interest rates, further fueling the rush to lock in higher fixed-rate deals.
- Financial experts recommend that savers take advantage of fixed-rate Cash ISAs offering up to 4.5% interest before rates potentially drop, with one- and two-year terms proving particularly popular.
- Martin Lewis and other financial advisers reassure savers that any reduction in the allowance will not affect funds already held in existing Cash ISAs.