Why cash ISA limit must stay in Budget - Yorkshire Building Society CEO Susan Allen
At a time of economic uncertainty, when many families are struggling to build financial security, cash ISAs have never been more important.
They are not just a savings product—they are a cornerstone of financial resilience for millions of people and a vital source of funding for the UK economy.
That’s why we, and other building societies, are urging the Chancellor to maintain the cash ISA.
More than 18 million people in the UK rely on cash ISAs as a trusted, tax-free way to save.
For many, it’s about more than interest rates—it’s protecting hard-earned money from tax and building a buffer against life’s challenges.
Nearly half of cash ISAs are held by people earning less than £20,000 a year.
Reducing the limit would penalise responsible savers and may mean they have more tax to pay, especially as the personal savings allowance has stayed the same since 2016.
Research shows that three quarters of UK adults are against any reduction in the cash ISA allowance, and for good reason: these accounts are often the first step toward owning a home and achieving financial stability.
But this is not just about individual savers—it’s about funding mortgages, supporting first-time buyers, and driving growth.
Cash ISA deposits—over £300bn nationwide—are a lifeline for mortgage lending.
Nearly 40 per cent of building societies’ retail savings balances come from ISAs.
Cutting the limit would reduce lending capacity, increase borrowing costs, and undermine the Government’s ambition to deliver 1.5m new homes.
It would also add unnecessary complexity to the ISA system without directly encouraging investment as our recent research shows only 28 per cent of Cash ISA savers would consider moving funds into a stocks and shares ISA if the limit were cut.
We believe the solution lies in education, not restriction. Instead of penalising those who choose the security of cash, we should focus on building confidence in investing through guidance and financial education—an approach aligned with the Financial Conduct Authority’s recent proposals.
Reducing the cash ISA limit would be a step backward for savers and for the economy.
When people feel more financially secure, they’re better equipped to face life’s challenges—and that benefits us all.