A win on cash ISAs …for now.

Last night, Rachel Reeves gave her ‘Mansion House’ speech; an annual address Chancellors use to share their plans (and often plaudits) for the financial sector. In front of dozens of well-dressed bankers in the heart of the City of London one announcement was notably and thankfully absent - a cut to the tax-free cap on Cash ISAs.  

The rest of her talk laid out the government’s new Financial Services Growth and Competitiveness Strategy, find more details in our press release here.  

Rumours started swirling at the start of 2025 that the Chancellor might slash the tax-free cap on Cash ISAs from £20,000 to £4,000, after meeting with a group of senior city and bank executives. Cash ISAs (individual savings accounts) are the most popular kind of savings account in the UK. Tax-free and low-risk, they help 18 million of us to save billions for a rainy day.

Rachel Reeves became the target of lobbying by big city firms to cut the allowance so that savers would be pushed into moving their money. By cutting the allowance for Cash ISAs while keeping the allowance on stock and shares ISAs the same, this would unfairly push people into making these riskier investments. Sadly yet another example of the power of Big Finance over politicians to change the rules to benefit them at a direct cost to the rest of us. 

No one should be forced to gamble their savings to help rake in *even more* profit for City bankers and stock market investors. After U-turning on bankers bonuses last year, we couldn’t let Labour bend to the will of big banks again so we joined the initial opposition to these changes earlier in the year, and were pleased to see the government initially hit the pause button back in March. 

As months passed, voices from across civil society, consumer groups, and building societies grew louder, Martin Lewis made the case on ITV’s This Morning and over 32,000 people signed our petition on 38 Degrees. A fantastic case of people power pushing the government to put people before big bank profits …for now at least. 

Because the Chancellor hasn’t ruled out further changes completely, ending her speech by saying “I will continue to consider further changes to ISAs engaging widely in the coming months”. There are many changes Reeves could make to improve ISAs and make taxes fairer, we’ll be exploring these in a future blog so keep an eye out for that. 

But in the meantime, on slashing the cap; Reeves can’t keep kicking this cash ISA can down the road - it needs crushing completely. So we need to keep up the pressure, if you haven’t yet, please add your name to the petition now, so we can keep pushing for an economic system that puts people over profit.