Chancellor Pledges Cash ISA Reform in Spring Statement
Catherine Alexander
Partner & Mortgage and Protection Adviser at GDA
The government has said that it will push ahead with plans to reform the structure of Individual Savings Accounts (ISAs) to get the balance right between cash and equities. However, there were no immediate changes announced in the Spring Statement, and the ISA allowance remains unchanged at £20,000 for 2024/25 and 2025/26. The Government say that they will be working closely with the Financial Conduct Authority (FCA) to increase investing confidence in the UK.
ISAs were launched by Gordon Brown in 1999, and cash ISAs are hugely popular with some £294 billion held in cash ISAs out of the total £726 billion held in ISAs in total according to data from HMRC for the tax year 2022/23. It will therefore be interesting to see how the reforms will work, which aim to help millions of people make better-informed decisions about their finances, including investing for the first time or transitioning from cash to investing. It will be important that any changes strike the right balance between encouraging more investment and disadvantaging those who rely on safer options.
Adult Cash and Stocks and Shares ISA market values per tax year for 2022/23 (HMRC).
As we come to the end of the tax year, here is a summary of your ISA tax allowances for 2024/25 and 2025/26:
ISA allowance
£20,000 each tax year shared across any type of ISA (Lifetime, Cash, Stocks & Shares).Lifetime ISA (LISA) allowance
£4,000 each tax year.Junior ISA (JISA) allowance
Maximum contribution of £9,000 each tax year per child. This is on top of your ISA allowance.
This article is for general information and does not constitute personal financial advice. If you’re unsure what’s best for you, seek independent financial advice.