Martin Lewis is sounding the alarm for millions of savers, warning that the current £20,000 tax-free cash ISA allowance might not stick around for much longer.
In his latest newsletter, the Money Saving Expert said there’s growing chatter that the government could slash the annual limit down to just £4,000 as soon as late 2025. And with the Autumn Budget due in October, changes could be on the horizon sooner than expected, reported Metro.co.uk.
“With so much current uncertainty, anything could or couldn’t happen, at any time,” he wrote, clearly not ruling anything out. He added that the idea behind the rumoured move is to push people towards shares ISAs instead, though he’s not convinced it’ll work. “Many will just keep saving but pay more tax,” he pointed out.
Around 7.9 million Brits currently use a cash ISA to save tax-free, and any change would be a big deal. While nothing has been confirmed by the Treasury yet, Martin’s advice is simple: act now, just in case.
The new tax year began on April 6, meaning you can still stash away up to £20,000 in your cash ISA for 2025/2026. And even if the limit is cut in the future, anything you’ve already put away won’t be affected – the changes would only apply to new contributions.
“Whether it’d start immediately, or in January or April 2026, no one knows (including at this point, I suspect, Rachel Reeves),” Martin explained. “Yet if you plan to save in a cash ISA, all of this would suggest getting it in sooner would seem safer.”
He’s also urging savers to shop around and not just stick with the same old ISA if it’s offering rubbish rates. On This Morning, he said lots of people are still sitting in “pants cash ISAs” they opened a decade ago, and could get much better deals elsewhere. His advice? Switch to a provider with a higher return – but make sure you do it properly.
And while the talk of limits and taxes can feel a bit overwhelming, Martin says it’s really not that complicated. “A cash ISA is just a savings account you don’t pay tax on. Don’t overcomplicate it.”
But if you’re planning to move your ISA savings, there’s one golden rule: don’t just withdraw the cash yourself. “You go to the new provider, and on the application form it will ask, ‘Do you want to transfer any money across?’ That’s how you keep the ISA status. Do not just withdraw the money yourself.”
With so much still up in the air, Martin’s message is clear – better safe than sorry.
