# Cash Isa limit cut may not encourage people to invest, finance expert says

By Tom Selby — 2025-11-25

Tom Selby, director of public policy at AJ Bell, said: “Few areas of policy have felt as chaotic as ISA reform in recent months.

“Having committed to simplification of ISAs in the run-up to the General Election, the government now appears set on reducing the Cash ISA allowance – a change which would make the landscape more complicated, harden the divide between holding cash and investing for the long term, and be hugely unpopular at the same time.

“If the Chancellor does announce a cut in the Cash ISA allowance, she will almost certainly need to ban transfers from Stocks and Shares ISAs to Cash ISAs on the day of the Budget.

“If she doesn’t, there is a real risk a change aimed at encouraging more people to invest will have the exact opposite effect in the short-term as people will be encouraged to transfer Stocks and Shares ISA funds into Cash ISAs while they still can.

“Reeves is also apparently keen on adding a UK element to her ISA reforms, although why this is necessary or how it might work in reality is anyone’s guess at this stage.

“The slightly bizarre, back-of-a-cigarette-packet approach to ISA reform is deeply concerning and raises the spectre of unintended consequences at a time the government has stated its intention to create a retail investing culture in the UK.

“Rather than rushing ahead with ill-thought-out ISA changes at this Budget, the Chancellor needs to step back from the precipice and gather evidence on the best way to reform ISAs to support retail investors.

“There is no obvious benefit to investors, the economy or the government from ploughing on with half-baked reforms that are unlikely to be effective and will be widely criticised by the industry and the general public.

“The government is taking a long-term view on pensions reform through the Pensions Commission and ISA reform demands a similar long-term approach.

“AJ Bell has long argued that simplification is the key to boosting retail investing and a proper review focused on the behavioural barriers to investing would at least have a chance of delivering real-world benefits to investors and the UK economy.”

Canonical: https://experts.pressassociation.com/expert/13/views/6b8c82b8e610168c