# ‘Sucker punch’ for savers as annual Cash Isa limit to be cut to £12,000

By Helen Morrissey — 2025-11-26

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “Bringing in separate rules for people over the age of 65 is aimed at helping retirees, who often need bigger cash balances.

“The change will enable them to move money from a Stocks and Shares ISA into a Cash ISA as they derisk.

“When you’re retired, as an emergency fund, you should have enough savings to cover 1-3 years’ worth of essential expenses in an easy access savings account.

“If this is all outside a tax wrapper, it can easily attract tax.

“However, introducing separate age-based rules risks bringing more complexity to ISAs.

“One of the key attractions of ISAs is that they make life easier for savers and investors, because they don’t have to worry about tax.

“The way this change is implemented needs a focus on simplicity, making it easy to save and invest.

“Today’s announcement on the Lifetime ISA will be worrying for those who rely on it for their retirement savings.

“The LISA has the ability to have a huge impact on the retirement prospects for groups such as the self-employed. This is a group that is not included in auto-enrolment and so miss out on employer contributions.

“They may also find pensions lack the flexibility that they need given as money cannot be accessed until at least the age of 55.

“The bonus on the Lifetime ISA has the same effect as basic rate tax relief on a pension and any income can be taken tax free after the age of 60.

“Added to this, money can be accessed early in case of emergency, albeit subject to an exit charge.

“It’s a product that has the potential on the long-term resilience of this group. The consultation into a replacement must consider the needs of self-employed people saving for retirement.

“They are already under-saving, so it’s important not to put any more barriers in the way.”

Canonical: https://experts.pressassociation.com/expert/40/views/e566d92b78d9e703