Chancellor Reeves Confirms £20,000 ISA Limit Retained

Chancellor Rachel Reeves has confirmed that the government will not reduce the £20,000 annual ISA allowance, abandoning previous speculation about cutting it to encourage more investment in equities. While Reeves emphasized the importance of helping savers achieve better returns by investing in stocks rather than cash or bonds, she remains committed to preserving the current tax-free limit. The government is exploring reforms to the ISA system, including potential consultations and changes aimed at balancing cash and equity investments to boost retail investment culture. Despite discussions about possibly lowering the cash ISA portion to push more people into investing, strong opposition from banks, building societies, and financial industry leaders has influenced the decision to maintain the existing £20,000 limit. City minister Emma Reynolds and other officials have met with major financial institutions, who warned that reducing the cash ISA limit could restrict consumer options without significantly increasing investment in equities. The Chancellor plans to launch further consultations on ISA reforms, potentially outlining proposals in upcoming speeches, but any changes will preserve the overall annual allowance for savers.