Money expert Martin Lewis has given an update on the government’s plans to change Cash ISA limits in future. The financial guru commented hot on the heels of Rachel Reeves’ spring statement on Wednesday afternoon as he dug through the various economic updates to find clarity on what the plans are for the tax-free savings accounts.
Despite months of speculation around changes to Cash ISA rules which predicted that the Chancellor could cut annual deposit limits from £20,000 to as little as £4,000, she did not announce a cut in her spring statement. But Lewis says that possible changes to Cash ISAs are definitely under consideration in the future.
He tweeted: “Government confirms in spring statement background documents that it is looking at ISA structures. Though no real detail. It says the government is looking at options for reforms to Individual Savings Accounts that get the balance right between cash and equities to earn better returns for savers, boost the culture of retail investment, and support the growth mission.
“Alongside this, the government is working closely with the Financial Conduct Authority to deliver a system of targeted support to give people the confidence to invest.”
This matches up with the latest rumours that any possible Cash ISA changes that are made are likely to come in the Autumn Budget later this year, to be implemented for the April 2026-27 tax year starting on April 6, 2026.
For now, it means that you are still able to deposit up to £20,000 in a Cash ISA tax-free before April 6, 2025, if you haven’t already reached your limit. Then from April 6, 2025, you can deposit another £20,000 for this upcoming tax year, for a total of £40,000 saved tax-free before any possible rule changes next April.
There have previously been reports that the idea of lowering the annual Cash ISA allowance to £4,000, from £20,000, was being mooted, to encourage more people to put their money into investments.
Several organisations, including building societies, have pushed back against the idea, while others have argued that it could encourage budding investors.
Treasury costings documents released with the spring statement assume the overall ISA limit of £20,000 remains in place up to and including 2029/30.
Richard Fearon, chief executive of Leeds Building Society, said: “We remain concerned about the long-term threat of a reduction in Cash ISA allowances.
“Reducing the amount which can be saved would have significant effects on savers, mortgage rates and 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.”
