New £20,000 cash ISA allowance update as Labour finally breaks silence
It comes after the Labour Party opted NOT to touch the £20,000 threshold today - amid reports it could be cut to £4k.
Rachel Reeves has issued a major update over an ISA rule change as details emerge in the Labour Party Spring Statement documents. It comes after the Labour Party opted NOT to touch the £20,000 threshold today - amid reports it could be cut to £4k.
Government spring statement documents said: “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.”
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Jeremy Cox, Head of Strategy at Coventry Building Society, said: “It's reassuring that the Chancellor has left Cash ISA allowances unchanged for now, providing much-needed certainty following recent speculation about changes to ISA rules and allowing millions of savers to breathe a sigh of relief. However, such relief may be short-lived as the Chancellor may be looking at bigger changes in the Autumn Statement.
“Those looking to maximise their tax-free savings still have 10 days to use their £20,000 ISA allowance before the 2024/2025 tax year ends.
“We believe that the current ISA allowance offers simplicity and balance, allowing flexible saving and investing. Cutting tax-free limits or adding complexity with the amounts people can shelter from tax for cash or stocks and shares won’t stop savers looking for low-risk, accessible cash accounts.
“Such changes will only lead to confusion for savers and higher costs for savings providers and HMRC, whilst making little impact on UK equity investment. One thing is certain - reducing Cash ISA allowances will be deeply unpopular with millions of savers.”
Kevin Mountford, co-founder and personal finance expert at Raisin UK, said: “Many will be pleased to see that ISA reforms did not make an appearance in the Spring Statement. So individuals can still contribute up to £20,000 into their ISAs - whether cash, stocks and shares or innovative finance - completely tax-free. With many worried the allowance could be reduced, ISAs remain a great way to save and invest your money. That being said, the end of the tax year is approaching so it is vital to make the most of your allowance before it refreshes with the new tax year.”