Cash ISA limits research

HTB / Cash ISA limits research

Listening to our savers

Reactions to the proposed Cash ISA allowance changes

With growing rumours that the government is considering cuts to the Cash ISA tax-free allowance from £20,000 to £4,000, we asked our customers how they’d feel about the change.

The results are clear – and they highlight the importance of listening to Britain’s savers.

Overall key findings

We asked our Cash ISA savers the big questions about the proposed reforms.

Over 1,250 Cash ISA savers responded to our July 2025 survey. Here’s what they told us:

Is the government’s plan to reduce the Cash ISA allowance a good idea?

Nearly all our Cash ISA savers (97%) oppose the reduction in the ISA allowance, viewing it as a harmful change to responsible saving. Only 1% felt it was a good idea.

Why do they use Cash ISAs?

All savers consider Cash ISAs important for their financial future
73% of Cash ISA savers use the tax-free allowance as a key part of their financial planning, including for retirement and tax planning
21% of ISA savers rely on their Cash ISA for generating regular income.

What were their concerns about the reduction, if any?

The top concerns from our Cash ISA savers were overwhelmingly (94%) about feeling penalised for saving responsibly, being pushed into riskier investments and facing increased tax on their savings interest.

How would their savings behaviour change if the tax-free allowance reduced significantly?

48.5% of our savers would move their money into regular savings accounts (for example, easy access, notice and fixed term savings accounts)
9% would move savings into a Stocks & Shares ISA (the intended beneficiary of the proposed Cash ISA reduction)
24% would consider less conventional investments such as premium bonds, pensions, or gold
2% would put it in a current account.

“Our customers have spoken with clarity and conviction. These aren’t just numbers - they’re people who’ve planned, saved and now feel betrayed. They feel penalised, and as one saver put it, at the age of ‘80 years old, I am not going to gamble my life savings in stocks and shares’."

Stuart Hulme, Managing Director of Savings

Concerns about reducing Cash ISA allowance

Savers are worried that reducing the cash ISA allowance will discourage saving and penalise responsible savers. Example feedback included:
- “Please don’t reduce the ISA annual allowance”
- “Lowering the limit in cash ISAs will not make older people put money into riskier stocks and shares ISAs”
- “Leave the cash ISA limit alone. We pay more than enough tax on everything else!”
- “For goodness sake, give us an incentive to save”
- As well as many mentions of “Ridiculous” and “Madness”.

Impact on older savers

Our older savers are concerned that they will be forced into riskier investments. Example feedback included:
- “I am 78 years old, so it makes little sense to be putting more money into long-term investments. These proposals will penalise the older savers”
- “Stocks and shares are for long term investment or so we have always been told. I am a pensioner and would like to spend rather than making a long-term investment.”
- “This is another outrageous attack on the older generation.”
- “At the age of 80 years old, I am not going to gamble my life savings in stocks and shares.”

Government policy and taxation

Our ISA savers feel that the government is unfairly targeting responsible savers with taxation policies. Examples of feedback include:
- “We are taxed on too much already. ISA allowances enable people on lower incomes to save efficiently”
- “Stop taxing us on our savings that we have already been taxed on as wages.”
- “Stop taking positive risk averse saving options away from regular and responsible savers”.

Financial planning and security

Our Cash ISA customers value the security and predictability of Cash ISAs for their financial planning.

Example feedback
- “Please don’t penalise our careful retirement planning”
- “Cash ISAs are v important for older savers who may not be around long enough to see good returns from stocks and shares ISAs and don’t want to take risks”
- “I like the stability of a cash isa rather than taking risks. I don’t have much but would rather have the stability instead of the uncertainty”
- “Cash ISAs provide a secure relatively risk-free source of income for retired people. To assume that the investor will switch to stocks and shares ISA is unfounded, a longer-term investment and essentially gambling with your savings – not for all!”