Proposed Cash ISA Cut Could Undermine Savers’ Confidence and Financial Security

Stafford, 03 July 2025 – The Treasury is considering a significant change to how people save through ISAs. While the overall £20,000 ISA allowance is expected to remain in place, Chancellor Rachel Reeves is anticipated to announce, in her Mansion House speech on 15 July, a proposal to reduce the amount that can be held in a Cash ISA each year. Reports suggest the new limit could be set between £4,000 and £10,000.

Why This Matters

The proposed change is intended to encourage more investment in stocks and shares ISAs, with the goal of boosting household returns and supporting the UK stock market. However, this shift could have unintended consequences for many savers.

At The Stafford Building Society, we believe this change risks doing more harm than good. Rather than prompting a meaningful move into equity investment, it may simply discourage saving altogether or push cautious savers into less appropriate and riskier financial products. Many of our members rely on the simplicity, security and tax-free status of Cash ISAs. Reducing the limit could force them to consider alternatives that do not offer the same level of comfort or protection.

Our View

Cash ISAs play a critical role for savers who value low risk and long-term financial stability. Restricting access to this form of saving could unfairly disadvantage those who prefer not to invest in the stock market, particularly older customers or those approaching retirement.

Carolyn Thornley-Yates, Chief Customer Officer, at The Stafford Building Society said:

“Our members trust us to help them make safe and sensible choices about their money. For many, Cash ISAs represent a straightforward way to save with confidence. These proposed changes could disproportionately affect those who are least able or willing to take on higher risk. In order to support financial services providers to deliver good outcomes for customers, we believe any reform must take the diverse needs of savers into account.

What Happens Next

The official proposal is expected on 15 July, with any changes likely taking effect in the 2026/27 tax year. While full details remain to be confirmed, The Stafford Building Society shares the concerns raised by others across the mutual sector about the potential impact on savers. We believe it is important that these voices are heard as part of the wider discussion, and we will continue to follow developments closely and share our perspective where appropriate.