Martin Lewis warns Rachel Reeves’ cash ISA cut plan will upset millions

Chancellor Rachel Reeves is reportedly planning to reduce the annual cash ISA allowance from £20,000 to £10,000, aiming to encourage people to invest in British company shares instead of holding cash. This move is intended to foster an American-style investment culture in the UK and divert billions of savings into domestic stocks. However, Martin Lewis, founder of MoneySavingExpert, warns that this plan will significantly upset millions of savers, particularly older individuals, without achieving its intended goal of increasing share investments. He argues that cutting the cash ISA limit would primarily result in more tax being paid on savings and create difficulties for building societies in raising funds for mortgages. Lewis acknowledges that a lack of investment in the UK is a problem but believes reducing the cash ISA allowance is the wrong approach. He suggests that the Treasury would benefit from increased tax revenue from savings if they were moved out of tax-free ISAs into standard savings accounts. In the 2023-24 financial year, nearly £70 billion was put into cash ISAs, with over 15 million people utilizing their allowance. The Treasury, while stating they will protect c... download the app to read more