With reports suggesting the annual Cash ISA allowance could be cut from £20,000 to £4,000, now’s the time to stay informed. Here’s what you need to know
In the news
Recent reports suggest the annual Cash ISA allowance could be reduced from £20,000 to £4,000, sparking widespread concern. The government is reportedly considering this move for two key reasons: to recover tax revenue currently lost through Cash ISAs and to encourage more people to invest in Stocks and Shares ISAs, which support UK businesses and promote economic growth. However, it's important to note that this remains only a rumour at this stage.
What should you do?
Martin Lewis, founder of Money Saving Expert, advises against making any rash decisions. He reassures savers that even if changes are introduced, they are likely to apply only to future contributions, not existing savings. In his own words:
"To those asking, should I take money out of ISAs? If there are changes, it will almost certainly (nothing's 100%) be on how much you can contribute in future. It would be very unlikely to impact any money already in Cash ISAs. So don't make any panic moves – just keep going, nothing has happened."
The public reaction
A recent study conducted by the Building Society Association (BSA) found that 73% of UK adults with Cash ISAs are opposed to the government scrapping the accounts or reducing the contribution limit. The BSA, alongside other organisations, is leading a campaign urging the government to maintain the current £20,000 allowance.
Save ethically with GWCU
If you're still under your 2024/25 tax year allowance, why not open a Cash ISA with GWCU – your ethical community bank? Supporting local people and communities, GWCU offers:
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3.5% AER interest
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Easy access with unlimited withdrawals
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Minimum deposit of just £1
It's a simple way to grow your savings while making a positive impact – what’s not to like? Apply here!
