#cash-isa

#cash-isa

Cutting the annual cash Isa allowance will not encourage many savers to switch to shares but could push up mortgage costs, MPs have warned the chancellor. Adults can put up to 20,000 a year in a tax-free Isa and spread the money between cash and stock market investments as they choose. In the 2023-24 tax year, 66% of all contributions went into cash savings.

Cash ISAs are not idle money. They meet real and practical needs, helping people to build financial resilience, save for a house deposit or manage their finances in retirement. They also provide the foundation for future investing and supplying essential funding for mortgages and other lending. The BSA's analysis suggests that a cut in the annual Cash ISA limit from £20,000 to £5,000 could lead to 17,000 fewer mortgage loans and reduce GDP by around £7 billion over five years, undermining economic growth and tax revenues.

Our ambition is to ensure that people's hard-earned savings are delivering the best returns and driving more investment into the UK economy.

"Reports Rachel Reeves will announce a cut to the cash ISA limit at her 15 July Mansion House speech. If true, I think it's a mistake."