Chancellor Rachel Reeves is facing significant pressure to protect the popular Cash ISA tax-free allowance as she prepares to deliver her crucial Autumn Budget next week.
Budget Fears for Savers
On November 26, the Labour Chancellor will outline the government's second budget, with growing concerns that she might target Cash ISAs to raise revenue. Industry experts warn that reducing the current £20,000 allowance could seriously impact millions of Britons who rely on these accounts for financial security.
New research from Nottingham Building Society reveals alarming statistics about saving habits across the UK. The study shows that 44% of savers do not save regularly, highlighting the importance of maintaining accessible saving options. Among older generations, the preference for Cash ISAs is particularly strong, with almost half (47%) of over-60s preferring this straightforward saving method.
Building Society Concerns
The data reveals increasing reliance on the full ISA allowance, with two-thirds of fixed-rate ISA customers at Nottingham Building Society using their entire £20,000 allowance this year, up from three in five last year.
Sue Hayes, CEO of Nottingham Building Society, delivered a clear message to the Chancellor: "Savers deserve choice. Cash ISAs are a trusted, straightforward way for people to save for the future - whether that's a first home, retirement or an emergency fund."
She emphasized that restricting this choice risks damaging financial confidence precisely when the government should be encouraging saving habits. Hayes also highlighted how mutuals like building societies use ISA deposits to support lending to aspiring homeowners, making any allowance cut counterproductive to Labour's ambition to double the size of the mutual sector.
Alternative Savings Concerns
Harriet Guevara, Chief Savings Officer at Nottingham Building Society, acknowledged the government's desire to promote investment culture but stressed that cutting the Cash ISA allowance is "the wrong lever to pull."
She explained that Cash ISAs remain one of the few straightforward, low-risk tools helping people build financial security, especially during economically uncertain times.
The research uncovered worrying consequences if the allowance is reduced: one in three savers would simply save less, while only 38% would consider switching to a Stocks & Shares ISA. This risks pushing people toward products they don't fully understand or out of saving altogether.
Guevara concluded: "We believe in optionality and giving people the freedom to save or invest in a way that fits their goals and risk appetite." The message to the Chancellor is clear: protect choice, protect confidence, and protect the Cash ISA.