The anticipated increase in the Cash ISA limit has been leaked ahead of the official announcement, and the latest figure is £12,000—higher than the previously predicted £10,000 cap. The Labour Party’s Chancellor, Rachel Reeves, is expected to confirm this new limit in the Autumn Budget set for November 26.
Reports indicate that Treasury officials favor £12,000 as a more balanced and acceptable figure compared to earlier speculations. This adjustment forms part of a broader review, marking the most significant ISA overhaul in 25 years.
Industry experts have weighed in on the changes. Andrew Gall, head of savings at the Building Societies Association, expressed concerns about reducing the Cash ISA limit at all. He stated, “We support efforts to help more people invest and build wealth, particularly within the UK. However, lowering the Cash ISA limit would undermine one of Britain’s most effective savings vehicles—a crucial tool that has enabled millions to build financial security and confidence in investment.”
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Contrasting this view, Michael Healy, managing director of IG, endorsed the Chancellor’s proposal. He argued that addressing the UK’s heavy reliance on cash savings is necessary to foster long-term wealth creation. “Concerns from building societies are largely exaggerated,” Healy noted, emphasizing that redirected funds would account for only 0.4% of building societies’ total retail deposits. He dismissed fears about any negative impact on the mortgage market as “scaremongering,” describing the reform as “sensible, proportionate, and long overdue.”
Additionally, there is discussion surrounding a mandatory allocation to UK equities within the stocks and shares ISA. This could mean requiring up to £5,000 of the current £20,000 stocks and shares ISA allowance to be invested in UK stocks. However, a Treasury source highlighted a preference for voluntary market-led initiatives over strict regulatory requirements.
This forthcoming budget announcement is poised to reshape the ISA landscape, aiming to balance incentives for investment growth with supporting the UK economy.