In an open letter to the Chancellor, published today, a wide range of stakeholders have joined together to call on the Government to save Cash ISAs and maintain the current £20k limit.
 
Figures from HMRC show that over 18 million people have a Cash ISA. Almost half (47%) of Cash ISAs are held by people with incomes of less than £20,000 a year, and the average savings balance is just under £13,400 [1].

Cash ISAs form a key part of many people’s savings, whether that is for their emergency buffer, saving towards a dream holiday, or protecting some of their wealth from changes in the stock market.

Beyond individual savers, Cash ISAs are an important source of funding for banks, building societies, credit unions and other providers which use the deposits to fund loans to households and businesses. Substantially reducing the role of Cash ISAs could lead to higher borrowing costs and reduced access to credit across the economy. 

Robin Fieth, Chief Executive of the Building Societies Association said:

“Cash ISAs are used for a wide range of purposes—from saving for a first home to managing finances in retirement. These are not idle funds; they serve real, practical needs for both savers and the building societies, banks and other providers that receive the funds, and use them to support mortgage and other lending. 

“Simply changing ISA limits is unlikely to encourage people to invest, but it will hurt people who are responsibly saving for short-term goals, where investing may not be appropriate.”

Cecilia Mourain, Chief Homebuying and Savings Officer at Moneybox commented: 

“Cash ISAs are vital for building financial resilience, and reducing the tax-free allowance  is unlikely to deliver on its intended objectives. Instead of supporting the Government’s ambition to build a stronger investing culture, it will discourage sensible saving behaviour, weaken demand for a popular product and disrupt the flow of capital that supports mortgage lending and economic stability. 

“At Moneybox, over one million people are saving and investing through tax-wrapped accounts on our platform, many of them on modest incomes. We know that a cultural shift towards investing won’t come from cutting the Cash ISA allowance, it will come from working with the industry to build confidence among savers. Any changes to the ISA regime must be long-term, consumer-first, and coordinated with broader regulatory reforms, such as the FCA and Treasury’s Advice Guidance Boundary Review. Without this, the government risks undermining trust in one of the most successful savings products of the last 25 years.”

[1] ISA Statistics, 2021/22 tax year. 18 million Cash or Cash+S&S, other figures Cash ISA only, published September 2024

Open Letter including signatories:

Dear Chancellor

We are writing to express our concern regarding recent speculation about cuts to Cash ISA subscription limits.

Cash ISAs are a cornerstone of personal savings for millions across the UK, helping people from all walks of life to build financial resilience and achieve their savings goals.

Beyond their personal benefits, Cash ISAs play a vital role in the broader economy. The funds deposited in these accounts support lending, helping to keep mortgages and loans affordable and accessible. Any significant reductions to the Cash ISA limits would make this funding more scarce which could have the knock-on effect of making loans to households and businesses more expensive and harder to come by. This would undermine efforts to stimulate economic growth, including the Government’s commitment to delivering 1.5 million new homes. 

Cutting the Cash ISA limit would send a discouraging message to savers, who are sensibly trying to plan for the future and undermine a product that has stood the test of time. It would make the whole ISA regime more complex and make it harder for people to transfer money between cash and investments.

Restricting Cash ISAs won’t encourage people to invest, as it won’t suddenly change their appetite to take on risk. 

We know that barriers to investing are primarily behavioural, therefore building confidence and awareness are far more important. There are opportunities to capitalise on the transformational changes to the advice-guidance boundary and to look again at risk warnings so that they encourage and reassure rather than scare people off investing. And we know that Cash ISAs themselves also act as a gateway to Stocks & Shares ISAs.

We also call for a long-term consumer awareness and information campaign to educate people about the benefits of investing, alongside maintaining strong support for saving. 

We therefore urge you to affirm your support for Cash ISAs by maintaining the current £20,000 limit. Preserving this threshold will enable households to continue building financial security while supporting broader economic stability and growth. 

Signed: 

Matt Bland, Chief Executive, Association of British Credit Unions Limited
Andrew Whyte, Chief Executive, Association of Financial Mutuals
Richard Ingle, Chief Executive, Bath Building Society
Janet Bedford, Chief Executive, Beverley Building Society
Dan Wass, Chief Executive, Buckinghamshire Building Society
Robin Fieth, Chief Executive, Building Societies Association
Peter Burrows, Chief Executive, Cambridge Building Society
Samantha Homer, Chief Executive, Capital Credit Union
Stephen Penlington, Chief Executive, Chorley Building Society 
Steve Hughes, Group Chief Executive, Coventry Building Society
Des Moore, Chief Executive, The Cumberland Building Society
Andrew Craddock, Chief Executive, Darlington Building Society 
James Paterson, Chief Executive, Dudley Building Society
Scott Devereux, Chief Executive, Earl Shilton Building Society
Gareth Griffiths, Chief Executive, Ecology Building Society
Mark Bogard, Chief Executive, Family Building Society 
Simon Broadley, Chief Executive, Furness Building Society
David Ross, Chief Executive, Glasgow Credit Union
Mark Selby, Chief Executive, Hanley Economic Building Society
Lucy Thomas, Corporate Affairs Director, Hargreaves Lansdown
Tracie Pearce, Chief Executive, Harpenden Building Society
Barry Carter, Chief Executive, Hinckley and Rugby Building Society
Annette Barnes, Interim Chief Executive, Leeds Building Society
Andy Deeks, Chief Executive, Leek Building Society
Gary Brebner, Chief Executive, Loughborough Building Society
Paul Wheeler, Chief Executive, Mansfield Building Society
Iain Kirkpatrick, Chief Executive, Market Harborough Building Society 
Rob Pheasey, Chief Executive, Marsden Building Society
Simon Taylor, Chief Executive, Melton Building Society
Cecila Mourain, Chief Homebuying and Savings Officer, Moneybox
John Woods, Executive Chairman, Moneyfacts Group plc
Will Carroll, Chief Executive, Monmouthshire Building Society
Dame Debbie Crosbie DBE, Group Chief Executive, Nationwide
Phillippa Cardno, Chief Executive, Newbury Building Society
Andrew Haigh, Chief Executive, Newcastle Building Society 
Sue Hayes, Chief Executive, Nottingham Building Society
Zack Hocking, Penrith Building Society
Mike Ellicock, Chief Executive, Plain Numbers
Julie-Ann Haines, Principality Building Society
Michael Boyd, Chief Executive, Progressive Building Society
Colin Field, Chief Executive, Saffron Building Society 
Paul Denton, Chief Executive, Scottish Building Society 
Stuart Haire, Group Chief Executive, Skipton Group
Richard Norrington, Chief Executive, Suffolk Building Society
Alun Williams, Chief Executive, Swansea Building Society
Joanna Causon, Chief Executive, Institute of Customer Service
Carol Knight, Chief Executive, The Investing and Saving Alliance
Stephen Jones, Chief Executive, The Stafford Building Society
Gavin Opperman, Chief Executive, Teachers Building Society
Adam Evetts, Chief Executive, Tipton and Coseley Building Society
Darren Ditchburn, Chief Executive, Vernon Building Society
Jonathan Westhoff, Chief Executive, West Brom Building Society
Susan Allen OBE, Chief Executive, Yorkshire Building Society

[ENDS]

Press contacts:

Katie Wise, katie.wise@bsa.org.uk  Tel: 020 7520 5904

Debbie Enever, debbie.enever@bsa.org.uk Tel: 020 7520 5926

Notes to Editors:
The Building Societies Association (BSA) represents all 42 UK building societies, including both mutual-owned banks, as well as 7 of the largest credit unions. Building societies have total assets of almost £525 billion and together with their subsidiaries, hold residential mortgages of over £395 billion, 24% of the total outstanding in the UK. They also hold £399 billion of retail deposits, accounting for 19% of all such deposits in the UK. Building societies account for 40% of all cash ISA balances.