Proposed cash ISA limit changes: how this could affect you
Rumour has it that savers may soon only be able to deposit up to £10,000 each tax year into their cash ISAs – down from the current £20,000 annual limit.
We’ll find out if the plan is going ahead and what the new limit will be in the Autumn budget on 26 November 2025.
But first, let’s look at how this change could affect you.
In this article, we discuss the rumoured changes to cash ISAs and explore how this could affect cash ISA savers.
Rachel Reeves' cash ISA changes
In February 2025, Rachel Reeves, the Chancellor of the Exchequer, shared potential plans to reform cash ISAs by reducing the maximum amount people could put into them each year from £20,000 to £4,000.
So while the overall annual ISA limit would stay at £20,000, savers would only be able to put up to £4,000 into cash ISAs.
One of the main aims of the proposed change was to get more people to invest their money instead of save.
This was met with a lot of backlash from banks, building societies and consumer campaigners, with many arguing that it wasn't the right way to get more people to switch to investing.
Having briefly faded away, the proposal is now back - with a new limit of £10,000.
What do the proposed cash ISA changes mean for me?
While you can currently pay in up to £20,000 each year across different ISAs (although lifetime ISAs have their own limit of £4,000 per year), if the plans go ahead you'll only be able to pay £10,000 per year into cash ISAs.
For any remaining money you'd usually put into a cash ISA, you could either:
- pay into a savings account. You wouldn't benefit from the tax advantages of ISAs though, meaning you may have to pay tax on interest
- invest it, for example into a stocks and shares ISA. This is the ultimate aim of the proposed changes.
Saving vs investing
The driving force behind the cash ISA limit reduction is to encourage more people to invest their money. This'll hopefully boost economic growth, as well as give savers more potential for their money to grow than with cash savings.
A 2024 report by Barclays found that 13 million UK adults hold £430 billion of “possible investments” in cash savings, missing out on the opportunity for better returns on their money.
And Rachel Reeves has been quoted as saying:
"It's really important that we support people to save, to achieve their aspirations. I'm not going to reduce the £20,000 ISA limit but I do want people to get better returns on their savings, whether that's in a pension or in their day-to-day savings."
But if you're not sure whether investing is for you, we get it.
While there's potential for greater returns with investing, it also comes with greater risk. Understanding these risks can help you weigh up whether investing is right for you.
We believe investing should be accessible to everyone. And that often starts with financial education. A great place to start is with our saving vs investing article, which looks at the pros and cons of both to help you decide where you want to put your money.
Investing doesn't need to be complicated
At OneFamily we're all about making investing simple.
Our Stocks and Shares ISA comes with a choice of three investment styles, which give you the freedom to invest your money in a way that’s rewarding and comfortable for you.
With investing, the value can go up and down and you could get back less than you’ve paid in if you withdraw your money at a time when the value is lower.
You may also be interested in:
Stocks and Shares ISAs: an alternative to cash ISAs?
With the rumoured changes to the cash ISA limit, you might be considering opening a stocks and shares ISA.
How many ISAs can I have?
ISAs are a great way to put money away for your future goals. But what types are available, and how many can you have?
Is it better to save or invest your money?
There are different ways to potentially grow your money. Find out the differences between saving and investing.
Getting started in investing
Investing can seem complicated. Read our beginner's guide to investing to understand how it could work for you.