Cash ISA limit still at risk as Rachel Reeves 'considers' ISA changes in 'coming months'

Chancellor Rachel Reeves refused to rule out a future change to Cash ISA limits in herMansion House Speech tonight.Although Ms Reeves did not announce a cut to the £20,000 annual tax-free cash savings limits, as had been widely feared for the past few months, the Chancellor did appear to leave the door open for a possible cut to the limits down the line.

In her speech to the financial services industry, Rachel Reeves was non-committal on Cash ISA limits. She declined to announce a change today but also refused to rule out a cut to limits in the future, telling savers she would 'continue to consider further changes to ISAs'.

Ms Reeves said in her speech on Tuesday night: "My final set of reforms are focussed on boosting savings investment. I recognise the potential for ISA reform to improve returns for savers and access to capital for UK businesses. "I have confirmed that Long-Term Asset Funds can be included in stocks and shares ISAs allowing long-term ISA investors to benefit from this innovative product.

"And I will continue to consider further changes to ISAs, engaging widely over the coming months.

"And recognising that despite the differing views on the right approach, we are united in wanting better outcomes for both savers and for the UK economy."

Reeves continued to stress that she wants to encourage more people to invest, and said stocks and shares are being presented 'in a negative light' and is working to review warnings on investing.

She added: "For too long, we have presented investment in too negative a light, quick to warn people of the risks, without giving proper weight to the benefits, and our tangled system of financial advice and guidance has meant that people cannot get the right support to make decisions for themselves."

Ms Reeves added that she will work with the Financial Conduct Authority to introduce 'a brand new type of support' for people to invest: "That is why we are working with the FCA to introduce a brand-new type of targeted support for consumers ahead of the new financial year. And I also welcome the campaign to promote the benefits of retail investment which will launch next April and the action to look at our current approach to risk warnings which will report back by January."

But some have said the plans announced tonight do not go far enough to encourage investing, and called for tax cuts to encourage investing.

Michael Healy, UK MD of investment platform IG, told the Express on Tuesday: "The Government is right to recognise retail investment as a major issue - engagement in investing is shockingly low, and consumers need to be educated, motivated, and incentivised to back the British stock market.

"However, diagnosing the issue does not solve it, and the proposed solutions laid out by the Treasury and FCA ahead of the Mansion House speech are frustratingly unambitious. Beyond the welcome rollout of targeted support and efforts to tackle lengthy and disproportionate risk warnings, very few of the rumoured regulatory changes are set to be particularly impactful.

"Even targeted support will only help at the margins in addressing excess cash savings - much less than the hoped-for scrapping of the cash ISA would have. Similarly, reform of the advice sector is unlikely to be a game changer, and education without incentive risks being met with yet more saver apathy.

"If the Government truly wants to end the culture of fear when it comes to investing, and reward British investors for backing the UK, it must implement changes which actually bolster people's wallets.

"We are calling for the scrapping of stamp duty on UK shares - a tax that depresses valuations and gives foreign firms and private equity a free pass - and the introduction of income tax relief on UK-listed shares. It is this sort of tangible ambitious approach which will actually boost economic growth - at a personal level and a national one - rather than just talking about it."

Brian Byrnes, head of Personal Finance at Moneybox, praised the Chancellor's decision to wait longer before making a change to Cash ISAs, if it does arrive.

He said: "The Cash ISA is a cornerstone of Britain's savings culture, and our research shows just how highly it's valued by savers. The tax-free allowance encourages people to save more and has played a vital role in helping individuals build financial resilience. If recent reports are accurate and the Government is choosing to consult before making any changes to the ISA allowance, we believe that's the right approach - a measured response that reflects both the evidence and public sentiment. We welcome this thoughtful stance on Cash ISA reform and urge continued engagement with savers, providers, and the wider industry.

"While we fully support the Government's ambition to foster a stronger investment culture in the UK, the focus on reducing the Cash ISA allowance as a primary lever is a clear case of the right diagnosis but the wrong prescription. Any ISA reform should aim to strengthen the system as a whole - not force a trade-off between saving and investing, both of which are essential to building long-term financial resilience."