Healey poised to overturn cut to cash Isa allowance in first budget
Summary
Chancellor John Healey is expected to keep the annual cash Isa allowance at £20,000, reversing a plan to reduce it to £12,000 from April. He is expected to encourage investment in shares through education rather than by limiting tax-free cash savings.Key Facts
- Rachel Reeves had planned to cut the annual cash Isa allowance from £20,000 to £12,000 from April.
- Cash Isas do not charge tax on interest, while Isas also shield income and capital gains from tax.
- Banks and building societies rely on customer deposits to help fund loans.
- Finance executives warned that reducing the allowance could discourage saving and raise mortgage rates.
- Quilter’s Jo Harris backed keeping the £20,000 limit and suggested adding an investment-only allowance.
- IG Group executive Michael Healy said keeping cash Isas could limit the flow of money into UK businesses.
- The Treasury declined to comment on the reported reversal.
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