Rachel Reeves had been under fire for reportedly planning to either scrap the cash ISA or reduce the £20,000 annual allowance, with a cap of £4,000 being considered. However, the proposals, which were touted as a way to boost the UK’s economy by encouraging more savers to take out stocks and shares, will not be announced in the upcoming Spring Statement.
Richard Fearon, chief executive of Leeds Building Society, said he was concerned the Treasury was still considering changes, although these will be announced at a later date.
Fearon said: “We remain concerned about the long-term threat of a reduction in Cash ISA allowances. Our members have already voiced their opposition and they are likely to stay worried until changes are completely ruled out.
“Reducing the amount which can be saved either now or in the future would have significant effects on savers, on mortgage rates and on wider aims to increase the size of the mutual sector.
“We will continue to make the case on behalf of our members for retaining the current rules, whether that comes as a single change or part of wider ISA reforms.”
Nottingham Building Society conducted a survey earlier this year, which found that 55% of savers opposed any cut to the cash ISA allowance, rising to three in four (76%) of over 55s.
Over three-quarters of those who took part in the survey, 78%, said they believed the Government should be promoting tax-free allowances such as Cash ISAs rather than discouraging them.
Only 38% say they would consider investing more in a stocks and shares ISA if the cash ISA allowance was cut, while one in three cash ISA holders – an estimated 2.5 million people – say they’d simply save less.
