John Healey reverses plan to cut ISA allowance to £12,000
Summarised from 3 outlets · Updated 29 Oct, 17:07 · Archive
Chancellor John Healey has reversed plans to cut the annual ISA allowance from £20,000 to £12,000, announcing the decision in his budget. The proposed reduction would have applied to savers aged under 65 and was scheduled to come into force in April 2027.
In his announcement, Healey said: 'I will not go ahead with the cut to the tax-free amount that people can put into a cash ISA. The limit will stay at £20,000 per year, tax-free for people of all ages, and to make investment more accessible, I will work with the sector to create a new starter ISA to reward first-time investors.'
Individual Savings Accounts allow people to save or invest without paying tax on interest, dividends or capital gains within the account. The annual ISA allowance currently stands at £20,000, meaning eligible savers can put up to that amount into ISAs each tax year without paying tax on the returns.
Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, welcomed the reversal. She said: 'Savers will be delighted to see the Cash ISA allowance U-turn by the Government, removing one of many complexities that were due to come into force in April. As warned when the changes were officially announced last year, this was a disappointing decision that added an extra layer of confusion.'
ISAs remain one of the UK's most popular savings products. HM Revenue and Customs figures show that around £135.7billion was paid into adult ISAs in the 2024/25 tax year, representing an annual increase of £32.7billion, with much of the growth coming from cash ISAs.
How it is being reported
- John Healey scraps Reeves' £8,000 ISA cut as 'savers will be delighted'Chancellor John Healey has reversed unpopular plans to cut the annual ISA allowance from £20,000 to £12,000 in a potential boost for savers.Andover Advertiser · 29 Oct, 16:45
- John Healey scraps Reeves' £8,000 ISA cut as 'savers will be delighted'Chancellor John Healey has reversed unpopular plans to cut the annual ISA allowance from £20,000 to £12,000 in a potential boost for savers.Romsey Advertiser · 29 Oct, 16:45
- John Healey scraps Reeves' £8,000 ISA cut as 'savers will be delighted'Chancellor John Healey has reversed unpopular plans to cut the annual ISA allowance from £20,000 to £12,000 in a potential boost for savers.Basingstoke Gazette · 29 Oct, 16:45
In this story: John Healey · Rachel Springall · HM Revenue and Customs · United Kingdom
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