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Rachel Reeves implored to not ‘tinker’ with ISAs amid tax raid fears: ‘Leave it alone!’

Chancellor Rachel Reeves is being implored to not “tinker” with ISAs in the upcoming Autumn Budget amid speculation the tax-free allowance linked to the savings product could be halved.

As it stands, Britons are able to place £20,000 into cash ISAs without having to pay to HM Revenue and Customs (HMRC) but concerns have been raised this threshold could plummet to £10,000.

Speaking exclusively to GB News EQ Investors financial planner Zoe Brett, is urging Treasury officials to consider a different course of action, if ISA reform is indeed being discussed.

Specifically, the finance expert noted that said cutting the limit would do little to raise revenue and could discourage ordinary savers rather than push them into investing.

Rachel Reeves and ISA form

Should the the Chancellor be considering a cut to the ISA tax-free allowance?

Ms Brett: “It would be such a shame. I don’t think it would raise the kind of revenue the Government is looking for, because the allowance is already so small.

“There’s this idea that if we penalise people holding large amounts of cash, they’ll automatically invest that money instead — but that’s not necessarily true.

“Some people simply don’t have the appetite for the risk that comes with investing. There will always be a portion of savers who think, ‘I’ll move it into a stocks and shares ISA,’ but they’re unlikely to be the majority.

“People hold cash because they’re comfortable with it — and those who are comfortable investing are probably already doing so.”

Examples of tax free Isa earnings in the UK if you had u00a320,000 in the Isa

What should the Labour Government be considering when it comes to ISAs?

Ms Brett: “As a financial adviser, I’d like to see the allowance increased — though I don’t think that’s likely to happen anytime soon.

“I’d really rather the Government didn’t tinker with it at all. ISAs have been part of our economy for a long time; they’re part of British culture now.

“If they’re not going to increase the allowance, they should just leave it alone. I’m particularly concerned about rumours of halving the cash ISA allowance.

“For the same reasons as with the personal savings allowance, I don’t believe it would encourage the kind of investment the Government is hoping for.

Cash ISA stock image

“It’s one of the very few tax breaks left for ordinary savers — people who aren’t ultra-high-net-worth investors — and I’d much rather they kept it that way.”

How should savers be making the most of ISAs?

“If you can, try to use your full £20,000 allowance before the Budget — just in case there are any changes.

“But certainly make sure it’s funded by the end of the tax year, because you can’t carry that allowance over. Once it’s gone, it’s gone.

“If it’s within your means, make the most of it. And if not, just contribute as much as you can — every little bit helps.”

LATEST DEVELOPMENTS

Cash ISA

Average UK savings rates have remained remarkably steady in mid-October, according to research conducted by Moneyfactscompare. Across all savings accounts, the average rate sits at 3.44 per cent, unchanged over the past week.

Instant-access “no notice” savings average 2.51 per cent, while one-year fixed-rate deals continue to offer stronger returns at 3.98 per cent.

Cash ISAs are tracking slightly higher, with no-notice ISAs at 2.72 per cent and one-year fixed-rate ISAs edging up to 3.92 per cent — their best level since September.

Overall, rates have plateaued after months of slow declines, suggesting the market has reached a holding pattern as lenders wait for clearer signals on the Bank of England’s next move.

LP Staff Writers

Writers at Lord’s Press come from a range of professional backgrounds, including history, diplomacy, heraldry, and public administration. Many publish anonymously or under initials—a practice that reflects the publication’s long-standing emphasis on discretion and editorial objectivity. While they bring expertise in European nobility, protocol, and archival research, their role is not to opine, but to document. Their focus remains on accuracy, historical integrity, and the preservation of events and individuals whose significance might otherwise go unrecorded.

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