Households with cash ISAs urged to make deposits as limits face cut

Households with a Cash ISA are being urged to make a deposit into their savings account as Chancellor Rachel Reeves is expected to announce rule changes in the autumn Budget.

The annual Budget is one of the most significant events of the year as it outlines tax, spending and borrowing plans for the year ahead, with Reeves already acknowledging she is looking at possible tax rises and spending cuts, as well as potential changes to cash ISA limits. The government confirmed in the Spring Statement earlier this year that it would carry out a thorough review of Individual Savings Accounts (ISAs), with Reeves saying the review would assess whether the system "is getting the balance right" between cash and shares. The government has previously shared its desire to encourage more people to invest rather than leaving money sitting in savings accounts, and there is speculation that the savings limit for Cash ISAs could be cut as a result.

Currently, adult savers can put up to £20,000 into a Cash ISA per year, where savings are free of income tax and capital gains, while the Junior ISA allowance sits at £9,000 annually. But financial experts have warned that Cash ISAs could soon be limited to £10,000 per year, 50% less than the current amount.

Ed Monk from Fidelity International said: "Latest reports suggest a cut to the Cash ISA allowance may be back on the table for the upcoming Budget on 26 November.

"The Financial Times has reported an 'ally' of Chancellor Rachel Reeves confirming the government would like to overhaul tax-free ISAs, potentially reducing the allowance for cash savings as part of a push for more investment into the UK stock market. A limit on the amounts saved in Cash ISAs could fall to £10,000 a year, the FT report suggested.

"Currently, individuals can split their £20,000 allowance between different types of ISA and contribute the whole amount to either cash or investments if they wish."

Savers have up until April 5, 2026, to deposit savings into a Cash ISA and financial experts are recommending that savers max out their allowance by this date ahead of any potential rule changes.

Andrea L Richards, accountant and CEO of management accounting services Accounts Navigator, said: "Max out your Cash ISA before any rule changes. The current cash ISA limit is £20,000, but it may be reduced to encourage stock market investing. If you have funds to save, using the full allowance before the Budget could make sense to protect them from tax."

She also advised using both pensions and ISAs to avoid paying more tax, adding: "Even if income tax rates stay the same, frozen thresholds could push more people into higher tax bands as wages rise. Using pensions and ISA allowances now can help manage the impact of this hidden tax."

It has been speculated that the overall ISA limit will remain unchanged, as the government has been considering a reduction in the allowances for Cash ISA savings while maintaining the overall £20,000 ISA limits.

In May, the Chancellor said: "I'm not going to reduce the limit on what people can put into an ISA but I do want people to get better returns on their savings, whether that's in a pension or their day-to-day savings. At the moment, a lot of money is put into cash or bonds when it could be invested in equities, in stock markets, and earn a better return for people."