Martin Lewis warns savers after Rachel Reeves' backs down on ISA shake-up

Labour officials have been analysing methods to steer savers towards the stock markets, with a Treasury minister previously claiming that "hundreds of billions of pounds in cash ISAs" are being siphoned away from the London Stock Exchange.

Chancellor Rachel Reeves confirmed her stance to the BBC on Tuesday: "I'm not going to reduce the limit of what people can put into an Isa.

"But I do want people to get better returns on their savings, whether that's in a pension or in their day-to-day savings."

However, Money Saving Expert founder Martin Lewis advised caution regarding this pledge. He speculated on X: "Reading between the lines its seems that, she is still considering announcing a cut specifically to the cash ISA allowance for new money (rumoured from current £20k down to as low as £4k) as part of Autumn Statement."

Reeves may have stepped back from cutting the Cash ISA allowance, yet her resolve to nudge savers into the stock market persists. She also told the BBC: "At the moment, a lot of money is put into cash or bonds when it could be invested in equities, in stock markets, and earn a better return for people."

Reeves added: "But I absolutely want to preserve that £20,000 tax-free investment that people can make every year."

Lewis explained why the statement could not be taken at face value, saying: "They were done in the (I suspect mostly forlorn) hope people will shift to investing that money, as the investment (and total) ISA limit would stay at £20,000 or even rise.

"In my view better investment education, communication and widespread accessible guidance would be a more effective way to the same goal."