Plan where to invest now ahead of the next Budget

CASH IS As have been hugely popular among savers wanting a low-risk, tax-free home for their money, but now they're under threat from Chancellor Rachel Reeves who would like us to invest more in shares.

- By Harvey Jones

Before last week's Spring Statement there were reports Reeves might cut the £20,000 cash ISA allowance to as little as £4,000, to drive people to put more into the Stocks and Shares ISA. Although she didn't announce any changes, afterwards she indicated the ISA regime is up for review.

With reforms expected in her Autumn Budget, savers are wondering what will happen to their cash ISAs.

SAVINGS

Savers can invest up to £20,000 in any combination of cash and shares they choose, ahead of the annual deadline at midnight on April 5, now less than a week away.

From April 6, they will get a brand-new ISA allowance covering the 2025/26 tax year, which Reeves is also unlikely to touch. Any changes almost certainly won't come into force until the start of the 2026/27 tax year, if she makes changes at all.

Jeremy Cox, head of strategy at Coventry Building Society, welcomed the decision to spare the cash ISA, saying millions will breathe a sigh of relief, but added: "Relief may be short-lived, as bigger changes may be coming."

Cash ISAs remain hugely popular, particularly among people who don't want to risk stock market investment. Many pensioners and cautious savers value ISA security and accessibility, even if returns are lower, Cox said. "Reducing the cash ISA limit will lead to confusion for millions."

EQUITIES