Building society bosses call on Rachel Reeves to rule out cuts to cash Isas

Building society bosses are calling on the Chancellor to rule out cuts to cash Isas after she delayed her reforms.

Rachel Reeves was considering reducing how much can be saved – possibly from £20,000 a year to just £4,000. But it is thought any change will be announced in the Autumn Budget, not in this month’s mini-Budget. 

Building societies are urging the Chancellor, who wants more savers to invest in shares, to rule out cash Isa cuts, which they say will mean pricier mortgages.

They have been backed by the Mail and This is Money’s Hands off our cash Isas campaign on behalf of savers who have nearly £300billion in accounts. 

Richard Fearon, chief executive of Leeds Building Society, said: ‘Our members have voiced their opposition. 

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‘Reducing the amount which can be saved now or in future would have significant effects.’

Harriet Guevara, chief savings officer at Nottingham Building Society, said: ‘Cash Isas are a vital tool that help people plan for key life moments. We believe the allowance should stay as is.’

Why cash Isas aren’t safe yet

Rachel Reeves had discussed making changes to limits or even scrapping cash Isas to push more savers into investing to boost UK markets and the economy.

Savers and experts alike had concerns the mooted changes would be announced in the Spring Statement, giving them just a couple of weeks to make a significant change to the UK’s tax regime.

The Financial Times has since reported that Reeves will not announce any changes to cash Isas in her statement, but changes are still being considered.

Investment industry bosses have lobbied the Government to put more focus on investing in the stock market, but scrapping the cash Isa would mark a significant change to savings.

Savers have also made it clear that they are against any changes to the tax-free wrapper and This Is Money and our sister title Money Mail have campaigned against changes. 

A survey by Nottingham Building Society found 55 per cent of savers oppose any cut to the cash Isa allowance, rising to 75 per cent in over-55s.

Ms Guevara said: ‘While we support the Government’s broader efforts to stimulate economic growth and drive investment in UK businesses, we remain steadfast in our view that there’s no guarantee that reducing the Cash Isa allowance would actually help – and in fact there’s a real concern that it will simply lead to people saving less.’