Overview
- The Financial Times reports the government is considering reducing the cash ISA limit from £20,000 to £12,000, with an announcement expected in Wednesday’s Budget.
- Sarah Coles of Hargreaves Lansdown says there is no evidence a lower cash ISA cap would drive savers into equities, pointing instead to the UK’s advice gap highlighted by the FCA.
- Quilter estimates some savers could face extra income tax of up to about £2,300 over five years if excess cash moves to standard savings, with impacts varying by tax band and personal savings allowance.
- HMRC data show nearly 10 million of about 15 million ISA subscriptions in 2023/24 were cash ISAs, with a sharp rise in cash flows underscoring their popularity.
- The Treasury Committee has urged ministers not to cut the cap, and building societies caution that lower ISA inflows could raise funding costs and make mortgages pricier.