Rachel Reeves set to cut annual cash ISA limit to £12,000 in Budget
Reeves expected to cut cash ISA limit in upcoming Budget
- Rachel Reeves is expected to announce a reduction in the annual cash ISA limit from £20,000 to £12,000 in her Budget on Wednesday.
- This change is intended to encourage households to invest their savings into the UK stock market and help address a £22bn fiscal black hole.
- Initial proposals considered a £10,000 cap, but this was reportedly raised to £12,000 after internal debate.
- The move follows a period where British households have accumulated £360 billion in cash ISAs, with investments in these accounts more than doubling recently, while stocks and shares ISAs decreased.
- Opposition leaders, including Tory shadow chancellor Sir Mel Stride, have criticised the plan, calling it a “tax raid on savers” that would harm those building financial security.