The Financial Times reported Chancellor John Healey plans to reverse a scheduled cut to the cash ISA limit, preserving a wider tax-free cash-saving option for younger savers.
The government’s announced policy would lower annual cash ISA contributions to £12,000 for people under 65 from April 2027, within the unchanged £20,000 overall ISA allowance. Former Chancellor Rachel Reeves announced the change at last year’s autumn Budget to encourage investment in the stock market.
Individual Savings Accounts (ISAs) shelter interest, capital gains and income from tax. Adults subscribed £135.7 billion to ISAs in tax year 2024-25, up £32.7 billion from the previous year, according to HM Revenue & Customs (HMRC) figures released in September.
Cash ISA subscriptions increased by £26.1 billion, or 37.5%. Stocks and shares ISA subscriptions rose £6.1 billion, or 19.7%, while Lifetime ISA subscriptions grew £472 million, or 20.1%.
The Financial Times said Healey favors explaining equity investing to savers instead of using a lower cash allowance to direct household money toward shares.
Healey is scheduled to deliver the Budget on Wednesday, Oct. 28.
