Treasury Committee Opposes Halving Cash ISA Allowance

Chancellor Rachel Reeves is reportedly considering halving the annual Cash ISA allowance from £20,000 to £10,000 in the November Budget to encourage savers into Stocks & Shares ISAs and help plug public finances. The cross-party Treasury Select Committee, chaired by Dame Meg Hillier, along with MPs, consumer champions and industry bodies, has strongly warned the government against the proposal, saying it is unlikely to shift cash into equities and would unfairly penalise savers. Critics warn the cut could reduce retail deposits available to building societies, threaten mortgage lending and potentially push up borrowing costs for homeowners. The committee urged the government to prioritise financial literacy and supportive measures rather than coercive tax changes. Reeves said any ISA changes would be set out in the Budget, would not be made in isolation, and that existing ISA balances would be protected.