# ISAs, taxes and pensions – what impact will next week’s Budget have?

By Andrew Prosser — 2025-11-19

Andrew Prosser, head of investments at InvestEngine, said: “Since Labour came to power, it’s felt like Groundhog Day for ISAs, with current Budget speculation offering no reprieve.

“Last year, the government scrapped Tory plans for a ‘British ISA’ on the grounds it would overcomplicate the system.

“Barely a year later, the same idea has resurfaced, with reports that platforms could be asked to steer investors into allocating 25 per cent of their funds to UK equities.

“It’s another example of putting UK PLC ahead of empowering people to make the right choices for their own financial goals.

“We’ve also seen significant indecision over ISA limits. Speculation around capping lifetime contributions appeared last year, but never materialised, while plans to cut the cash ISA allowance have swung from £4,000 to £10,000 and now £12,000.

“Whatever the final figure, savers and providers are tired of the policy whiplash – they need stability and clarity.

“Getting more people to invest is clearly a priority for the Chancellor and it’s a worthy goal, but cutting the cash ISA allowance won’t achieve this.

“Many will simply keep their savings outside the ISA wrapper, and risk ending up paying more tax on their interest.

“What’s more, UK equities already make up a healthy share of ISA portfolios in Britain.

“Investors shouldn’t be forced to invest patriotically. Instead, focus should be on helping people understand how investing works and giving them the tools to make confident, informed decisions.

“Simplifying the ISA system at the Budget, not complicating it with quotas or varying allowances, is the way forward.

“Improving financial education and accessibility will drive participation in investing far better than restrictions.

“Our latest research shows consumers want simple, low-cost options if they are to take up investing, though awareness of appropriate products like exchange-traded funds remains low.

“However, when these products are explained, interest rises sharply – underlining how vital education is to boosting confidence.

“It’s the reason why we’ve built InvestEngine around ETFs, offering a straightforward, diversified and affordable way for more people to invest.

“We welcome efforts to encourage long-term investing but, after a year of uncertainty, a different approach that gives consistency to ISA policy is now needed.

“We’ll be watching closely to see how the Chancellor addresses this in the Budget next week.”

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