Cash Isa guidelines WON’T change in spring assertion however Chancellor is not ruling out shake-up later this yr

The Chancellor will not make any changes to the current cash Isa rules in the spring statement later this month, but has not ruled out reform later this year.

Rachel Reeves had discussed making changes to limits or even scrapping cash Isas to push more savers into investing to boost UK markets and the economy.

Savers and experts alike had concerns the mooted changes would be announced in the Spring Statement, giving them just a couple of weeks to make a significant change to the UK’s tax regime.

The Financial Times has since reported that Reeves will not announce any changes to cash Isas in her statement, but changes are still being considered.

She reportedly said that any big fiscal decisions, including Isa reform, would have to wait until the autumn budget.

Cash Isa shake-up: Reeves has delayed any reform to the savings vehicle until later this year

City figures have lobbied the Government to put more focus on investing in the stock market, but scrapping the cash Isa would mark a significant change to savings.

Savers have also made it clear that they are against any changes to the tax-free wrapper and This Is Money and our sister title Money Mail have campaigned against changes. 

A survey by Nottingham Building Society found 55 per cent of savers oppose any cut to the cash Isa allowance, rising to 75 per cent in over-55s.

Victor Trokoudes, founder and chief executive of money app Plum believes that while investing is important for long-term savers, ‘the discussion shouldn’t be about investment versus savings. Savings are also important when we look holistically at how to grow money for life.

‘Frankly speaking, investing isn’t a suitable option for those who are building their emergency financial buffer, or don’t want to take on any risk because they have a particular goal in mind for the very short-term.

‘For example, if you were saving for a house deposit and wanted to buy soon or had a special event like a wedding coming soon, you likely wouldn’t want to put your capital at any risk in the stock market.’

Nottingham Building Society’s survey found 41 per cent of 25-34 year olds believe a cut would impact their ability to put down a home deposit, while a third of all savers believe their retirement would be affected.

The vast majority (78 per cent) believe the government should be promoting Isas rather than discouraging them.

Harriet Guevara, chief savings officer at Nottingham Building Society, said: ‘We welcome the fact the Government has heard the concerns of the industry and the public around potential changes to the cash Isa allowance, and that no changes will be announced in the upcoming spring statement.

‘While we support the Government’s broader efforts to stimulate economic growth and drive investment in UK businesses, we remain steadfast in our view that there’s no guarantee that reducing the Cash Isa allowance would actually help – and in fact there’s a real concern that it will simply lead to people saving less.’

The FT reported that City figures will host a roundtable after the spring statement ‘focused on reforming the Isa framework’ to ‘explore potential policy options to encourage a shift from cash into stocks and and shares investment when in savers’ best interests’.

Some executives have urged Reeves to consider a single Isa for both cash and shares.