Government states it is looking at ISA reform options in Spring Statement 2025

The Government stated in its Spring Statement 2025 that it was "looking at options for reforms to ISAs 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"¹. The Treasury Committee's eleventh report of session 2024-26, published on 25 October 2025, sets out that statement alongside the evidence it took on the Cash ISA¹.

The report records the scale of cash saving. Cash ISAs took 66% of all ISA subscriptions in the 2023-24 tax year, and 14.4 million people hold a Cash ISA and no other type of ISA¹. The total saved in Cash ISAs at the end of 2023-24 was £360 billion, with an average value of £26,900 per Cash ISA and an average subscription of almost £7,000 per person in that year¹. The maximum an individual can contribute across all their ISAs in a tax year is £20,000¹.

The committee heard competing arguments. The Financial Conduct Authority's Financial Lives Survey 2024 found 61% of adults with savings over £10,000 held all or most of their investible assets in cash savings rather than investments, up from 55% in 2020¹. The Association of Investment Companies' chief executive, Richard Stone, argued for cutting the annual Cash ISA contribution to £5,000 "at the very least"¹. On the other side, more than 50 building societies, trade associations and other financial firms wrote an open letter to the Chancellor published on 9 July 2025 calling for the current Cash ISA allowance to be maintained¹. The committee's own recommendation was that:

The report also cites survey evidence on how savers might respond. Research from Rathbones Group found just under one in five (19%) retail investors would invest more in the stock market as a result of a Cash ISA allowance reduction, while Hampshire Trust Bank found 9% of its survey responders would move to a stocks and shares ISA and 48.5% would contribute to other savings accounts¹.

Why it matters for households

The ISA allowance is £20,000 a year across all ISA types, and the report notes that any change to the Cash ISA share of it would affect the 14.4 million people who hold a Cash ISA and nothing else¹. The committee's conclusions are that reducing the Cash ISA allowance is unlikely to drive a significant transfer of cash savings into investment products, and that it would constrain building societies' access to retail savings, which the report describes as a critical funding source for their mortgage lending¹. The report also notes that savers may benefit from tax-free allowances on interest from non-ISA accounts, and suggests any rationalisation of tax-free cash savings might more sensibly start by examining the case for the tax-free interest allowance¹. No change to the allowance has been announced.

What happens next

The report is a committee report with recommendations to government, and the Government has two months to respond¹. The Government's Spring Statement 2025 statement that it was looking at ISA reform options is the most recent position recorded in the report; no decision on the Cash ISA allowance has been reported¹.