Rumours have run red hot ahead of the Autumn Budget on 26 November. With changes to tax-free cash for pensions, salary sacrifice contributions, income tax and national insurance all being speculated about.
Some have been quashed quickly while others remain on the table, but one rumour’s still lurking – a proposed change to the Cash ISA allowance.
So, what could happen to the Cash ISA and how can savers get the best rates before any changes are announced?
This article isn’t personal advice. If you’re not sure if an action is right for you, ask for advice. Remember, ISA and tax rules can change, and benefits depend on individual circumstances.
What is the proposed Cash ISA allowance cut?
Rachel Reeves’ initial proposal to cut the allowance to £10,000 per tax year was quickly shot down by Building Societies, worried about their future lending power. The Building Societies Association (BSA) warned that the cut would bring 60,000 less mortgages each year as they’d have less money to lend to applicants.
The Treasury Select Committee of MPs also warned the Chancellor to not cut the allowance, siding with the BSA. So without much fanfare, the £10,000 allowance was shelved and a new limit of £12,000 proposed instead.
In both cases, the overall ISA allowance of £20,000 would not change to incentivise using Stocks and Shares ISAs.
For savers though, Cash ISAs are often a first port of call when people are starting out. And, they’ll often gradually move over into investments as they find their feet.
But reducing the allowance means savers could have less available to transfer into Stocks and Shares ISAs when they become comfortable with investing – effectively reducing investments rather than boosting them.
This is an issue which requires a carrot and not the stick approach.
The barriers to investing are typically behavioural, so it's through encouragement and increased confidence that could increase the number of retail investors in the stock market.
Why cut the Cash ISA allowance – a revival of the British ISA?
One reason touted for the potential cutting of the Cash ISA allowance is a bid to push up investment in British companies and the stock market.
UK stocks have suffered in more recent years, with global stocks holding more appeal to investors. As a result, UK companies are at risk of being snapped up by overseas companies or private equity at cheaper rates.
Reeves’ aim is to encourage ISA providers to revamp their Stocks and Shares ISA products to have a set percentage invested in UK companies, proposed at 25%. Then the remainder allowance being free to be invested where the investor wants. This is like a revival of the previous ‘British ISA’ concept, although in a different style.
That ‘British ISA’ concept was talked about previously under the Conservatives and even went out to consultation with providers. However, it was eventually scrapped with concerns about it’s effectiveness and complicating the ISA framework.
What can savers do now? – Plus how to find great Cash ISA rates
If you’re looking to use your Cash ISA allowance, now is the best time to do it.
The cut hasn’t been officially confirmed yet, so it’s best to work with what we know right now, which is the current ISA allowance of £20,000.
If you’re looking for great Cash ISA rates, there are still lots of rates available above 4%, above the latest inflation rate of 3.8%.
But it’s worth shopping around to try and get the best rates you can for the level of access you need.
Here’s where the HL Cash ISA can help.
You can manage your Cash ISA portfolio with more than 10 banks all on a single online platform – so you can see everything in one place.
It also lets you spread your money across fixed-rate, easy-access, and limited-access products.
You can then manage it alongside your savings and investment accounts, all through one log in.
HL have also launched our own easy-access Cash ISA rate, offering a market leading rate of 4.55% AER* (4.46% tax-free) variable, powered by Shawbrook.
Unlike other Cash ISA products, the HL easy-access product allows HL to control the rate so we can offer exclusive rates. Savers’ money is then placed with Shawbrook.
All saving products in the HL Cash ISA benefit from FSCS protection. The Financial Service Compensation Scheme covers up to £85,000 per banking licence.
Just remember, products in the HL Cash ISA can be added or withdrawn at any time.
*AER (Annual Equivalent Rate) shows what the interest rate would be if it was paid and compounded once each year. It helps you compare the rates on different savings products. Interest is paid tax-free. Market-leading rates checked against Moneyfacts 13 November 2025.
This website is issued by Hargreaves Lansdown Asset Management Limited (company number 1896481), which is authorised and regulated by the Financial Conduct Authority with firm reference 115248.
The Active Savings service is provided by Hargreaves Lansdown Savings Limited (company number 8355960). Hargreaves Lansdown Savings Limited is authorised and regulated by the Financial Conduct Authority (firm reference number 915119). Hargreaves Lansdown Savings Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 with firm reference 901007 for the issuing of electronic money. Hargreaves Lansdown Asset Management Limited and Hargreaves Lansdown Savings Limited are subsidiaries of Hargreaves Lansdown (company number 2122142).
(Photo by Dan Kitwood/ Getty Images)