Savings and ISAs in focus after the Spring Statement

The government is considering changes to the ISA system to help more people start investing, according to documents published alongside the Chancellor’s Spring Statement on Wednesday.

As part of this, it also plans to work with the Financial Conduct Authority to help build confidence and support better long-term financial decisions.

The Treasury’s Spring Statement document read: “The government is looking at options for reforms to Individual Savings Accounts that get the balance right between cash and equities to earn better returns for savers, boost the culture of retail investment, and support the growth mission.”

In the lead-up to the Spring Statement, there was speculation that the £20,000 annual Cash ISA allowance could be reduced to £4,000, with some calling for changes to encourage greater investment in markets. However, no such change was announced — a pragmatic decision, given the important role Cash ISAs continue to play in helping individuals manage their savings with security and flexibility.

Keeping the £20,000 Cash ISA allowance unchanged is a sensible outcome, offering short-term savers a valuable, tax-free way to manage their money with flexibility and security.

While long-term investing remains key to building wealth over time, cash continues to play an important role in a well-balanced financial plan — particularly for short-term goals or emergency needs.

Encouraging more investment in markets is a valid objective, but it requires a clear and accessible framework that supports informed decision-making and appropriate risk management. Simply directing more savings into Stocks and Shares ISAs won’t necessarily translate into greater support for UK growth, especially if that capital is invested globally or through secondary markets.

Although no changes were made in the Spring Statement, further reforms could still be announced later this year. Savers may wish to consider making use of their tax-free allowances early in the new tax year, while also reviewing how their savings are allocated across short- and long-term objectives.

Explore our ISAs

For those thinking about how to make the most of their tax-free allowances, our new Cash ISA could be a good place to start. It offers a straightforward way to grow your savings without paying tax on the interest — and keeps your money easily accessible. Designed to sit alongside long-term investments, it gives you the flexibility to manage short-term goals while staying focused on the bigger picture.

For your longer-term savings needs, our Stocks and shares ISA, managed on your behalf, still remains our most popular service. 

As ever, we encourage you to get in touch with your consultant to discuss any thoughts and ensure your portfolio is aligned with your long-term financial goals.