Understanding the Government's ISA Reforms - What This Means for Your Cash ISA
For more than 25 years, UK taxpayers have been saving their money in Cash ISAs, benefitting from steady returns which are completely protected from taxation. Over the decades, the annual ISA allowance has gradually increased, and currently sits at £20,000. This means that every UK taxpayer can add up to £20,000 per year into an ISA account of their choice – this could be a Cash ISA, a Stocks and Shares ISA, or an Innovative Finance ISA (IFISA).
However, the Cash ISA has always been by far the most popular. According to provisional HMRC statistics, during the financial year 2022-2023, more than 7.8m Cash ISA accounts were active. This compares with approximately 3.8m Stocks and Shares ISA accounts, and 17,000 IFISA subscriptions.
In the run up to the Spring Statement, there were rumours that Chancellor Rachel Reeves planned to cut the £20,000 annual ISA allowance and reform the Cash ISA, sparking panic amongst savers and investors and prompting a flurry of ISA allocations. As a result, more than £4.2bn was deposited in Cash ISAs in March 2025 - a 31 per cent year on year increase[1].