Martin Lewis: Cash ISA limit could be cut – this is 'p*ss people off economics'

MSE_Molly_G

Reports in various newspapers, including the Financial Times, suggest that the Chancellor Rachel Reeves will announce a cut to the £20,000 cash ISA limit during her Mansion House speech on Tuesday 15 July. MoneySavingExpert.com founder Martin Lewis has reacted to the news, calling the potential cut "a mistake".

Read the full story:

Martin Lewis: Cash ISA limit could be cut – this isn't 'nudge economics', it's 'p*ss people off economics'

If you haven't already, join the forum to reply.

RedImp_2

Obviously there are rumours / leaks rather than announcements but the Telegraph are reporting that Chancellor will likely announce changes to Cash ISAs in speech on July 15.

HedgehogRulez

Exciting!!

subjecttocontract

Can't wait !

4justice2

Also same story reported in the FT today......

Hoenir

Be no changes mid tax year that's one certainty. 

RogerPensionGuy

This possible reduction in the mini cash ISA has been mooted about a lot for a long time like so much stuff they do, pensions instability and the near impossible way they make pension planning a game of luck is my personal buggbear. 

Although maybe some people put too much % of wealth in mini cash ISAs and may of got/get more gains via other investment vehicles like S&S ISAs, it is their choice. 

Any reduction in the mini cash ISA will get lots of unwanted unhappy press/feelings and looking around, I will guess this outcome will be unwanted at this time, so I'll guess this bone will be left alone for now. 

Kim_13

I doubt anyone would dispute that it shouldn’t be possible to save more tax free than can be earned tax free - but a sensible policy where the tax free allowance went up slightly and the ISA limit went down to pay for it would be expected. This just reduces choice, and there comes a point when investing 75% or whatever the figure may be is reckless. One size does not fit all.

I wonder if we will see a return of the Mini/Maxi naming.

Middle_of_the_Road

RogerPensionGuy said:

This possible reduction in the mini cash ISA has been mooted about a lot for a long time like so much stuff they do, pensions instability and the near impossible way they make pension planning a game of luck is my personal buggbear. 

Although maybe some people put too much % of wealth in mini cash ISAs and may of got/get more gains via other investment vehicles like S&S ISAs, it is their choice. 

Any reduction in the mini cash ISA will get lots of unwanted unhappy press/feelings and looking around, I will guess this outcome will be unwanted at this time, so I'll guess this bone will be left alone for now. 

What are you meaning by "mini cash ISA"?

mebu60

RogerPensionGuy said:

This possible reduction in the mini cash ISA has been mooted about a lot for a long time like so much stuff they do, pensions instability and the near impossible way they make pension planning a game of luck is my personal buggbear. 

Although maybe some people put too much % of wealth in mini cash ISAs and may of got/get more gains via other investment vehicles like S&S ISAs, it is their choice. 

Any reduction in the mini cash ISA will get lots of unwanted unhappy press/feelings and looking around, I will guess this outcome will be unwanted at this time, so I'll guess this bone will be left alone for now. 

The mini/maxi distinctions went somewhere around 2008. S&S limit was £7k but most you could hold in cash ISA was £3k. There was also an insurance product up to £1k. 

poseidon1

mebu60 said:

RogerPensionGuy said:

This possible reduction in the mini cash ISA has been mooted about a lot for a long time like so much stuff they do, pensions instability and the near impossible way they make pension planning a game of luck is my personal buggbear. 

Although maybe some people put too much % of wealth in mini cash ISAs and may of got/get more gains via other investment vehicles like S&S ISAs, it is their choice. 

Any reduction in the mini cash ISA will get lots of unwanted unhappy press/feelings and looking around, I will guess this outcome will be unwanted at this time, so I'll guess this bone will be left alone for now. 

The mini/maxi distinctions went somewhere around 2008. S&S limit was £7k but most you could hold in cash ISA was £3k. There was also an insurance product up to £1k. 

Yes it is useful to remember that the cash ISA limit was not always as generous as it is now.

 For my part my entire annual ISA allowances were always devoted to stocks and shares until early 2023, when cash ISA rates started to rise significantly on the back of B of E base rate increases.

Since the rationale behind this proposed reduction to cash isa limits is to drive investors towards UK  equity investing ( via ISA), it will be interesting to see if QMMFs ( quasi cash)  might be barred. Also what of government gilts and corporate bonds ( a sizeable component of my S & S ISA) ? Clearly neither of those are equities . 

Be interesting to see the finer details of the proposal, but agree the  intial indicators are not good for the great swathe of risk averse ISA savers.