Rachel Reeves (pictured), chancellor of the exchequer. Credit: Kirsty O'Connor / Treasury
Any changes to Cash ISAs are now not expected to be included in the upcoming Spring Forecast, according to reports.
It was previously reported that Chancellor Rachel Reeves was considering slashing the tax-free limit for Cash ISAs from £20,000 to £4,000 a year in a push to get more people to invest their savings.
However, reports have now suggested that any Cash ISA changes would be announced on 26 March and instead could come in the Autumn Budget.
It has also been reported that the Labour government is still considering the possibility of cutting the maximum amount people can put into Cash ISAs.
The Guardian said that Reeves hoped to strike a balance between money put into cash and shares, and there has been speculation that she could announce a longer-term reform which will be announced in the Autumn.
In recent analysis by Quilter, following a brief period of seven months where returns on Cash ISAs beat inflation, they fell back into negative territory.
The wealth firm said this means savers "lose money in real terms".
With UK Consumer Prices Index (CPI) inflation hitting 3% in the 12 months to January 2025, and the monthly interest rates available on Cash ISA deposits, including unconditional bonuses, dropping to 1.77%, Cash ISA savers face a real terms loss of 1.23%.
Reeves' Spring Forecast expected to trigger billions in spending cuts - reports
January was the third month in a row where savers suffered a real terms loss on Cash ISA savings since March 2024, Quilter's analysis showed. However, back in July 2022, Cash ISA savers were suffering a historic 9.4% loss on their money as inflation eroded their savings.
This article was originally published in Investment Week's sister publication Professional Adviser.
