Government changes tack on Cash ISAs: Experts respond

 
Flagstone, the UK’s largest savings platform handling £16bn of UK savers’ cash, welcomes reports of the Government’s intention to consult with industry on proposed changes to Cash ISAs.
 
CEO Simon Merchant says:

 
It’s reassuring to see the Chancellor listening to industry and stepping back to consider the broader implications surrounding Cash ISAs. Cutting the Cash ISA allowance would have a significant impact on both the savings and lending markets. Savers deserve protection from their government – not pressure to take risks or make financial decisions they don’t fully understand or feel comfortable with.

We welcome the chance to have a meaningful conversation with the Treasury – one that properly considers the nuances and real-world consequences of such a sweeping change. This policy feels like it was cooked up by people with vested interests. Now it’s time for the government to do the right thing and ensure people have the support they need to make good personal finance decisions.
 

Reducing the Cash ISA limit is unpopular with UK savers. New data from Flagstone shows:
 

• 7 in 10 Cash ISA savers think the Treasury’s plan to limit deposits is ‘unfair’ (70%)
• and savers are more likely to spend surplus savings on bills (11%), mortgages (11%) and pensions (11%) before choosing to invest it (9%) anyway
• 46% of Cash ISA savers aren’t confident in their ability to make good investment decisions

Flagstone has pledged its commitment to savers by confirming it will launch up to 10 brand new Cash ISAs in time for the next ISA season.
 

Cecilia Mourain, Chief Homebuying and Savings Officer at Moneybox, said:
 

“We welcome the Government’s thoughtful approach to Cash ISA reform and urge continued engagement with savers, providers, and the wider industry.

“Our recent customer survey shows just how engaged savers are as 92% believe no changes should be made to long-standing savings products without consulting users first. Over half (53%) said reducing the Cash ISA allowance would erode trust in Government decision-making, and 40% see no clear justification for doing so at this point.

“A consumer-first, evidence-based approach is essential to ensuring Cash ISAs remain a valuable tool for building financial resilience and long-term confidence.

“Reform should not happen in isolation. It must align with broader initiatives like the Advice Guidance Boundary Review and the Pensions Investment Review. Cash ISAs aren’t a blocker to investing—they’re a gateway. Saving and investing go hand in hand, and both are crucial to achieving financial goals at every stage of life.”