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Select committee: Treasury Committee

11th Report - Cash Individual Savings Account

HC 1422 Published 25 October 2025

Treasury Committee Report on parliament.uk ↗

At a glance2 recommendations and 2 conclusions · Government response published 14 January 2026 (deadline 25 December 2025)

The government's response

Summary written by Accountability Index from the government's response. It is not the government's own words.

The government did not adopt the Committee's recommendation against cutting the Cash ISA limit, and set out that the limit will be £12,000 from April 2027 for under-65s, with financial education and investment support measures alongside.

  • Savers aged 65 and above are carved out of the lower limit, "in recognition that they may need more flexibility in how they manage their savings as they approach retirement".
  • On financial literacy, DfE "plan to reform" the maths and citizenship programmes of study, including making citizenship compulsory in key stages 1 and 2, as part of the Financial Inclusion Strategy.
  • On the tax-free interest allowance, the response states that reductions in the Personal Savings Allowance "would bring many people into paying tax on small amounts of savings income" and create "disproportionate additional costs for HMRC".
  • The government is working with the FCA to roll out Targeted Support from April 2026, and will allow Long Term Asset Funds to be held in Stocks & Shares ISAs from April 2026. Help to Save will be made permanently available for new savers and expanded from April 2028.

Read the government's response ↗ Report an error

Sources

Recommendations and conclusions 4

  1. 1
    The Government’s ambition to encourage long-term investment by retail savers is in the interests of... Conclusion · addressed to HM Treasury Conclusion (the committee's words)
    The Government’s ambition to encourage long-term investment by retail savers is in the interests of both savers and the wider economy. However, reducing the Cash ISA allowance is unlikely to drive a significant transfer of cash savings into investment products. (Conclusion, Paragraph 14)
  2. 2
    Building Societies are major providers of Cash ISAs and contribute to the diversity of the... Conclusion · addressed to HM Treasury Conclusion (the committee's words)
    Building Societies are major providers of Cash ISAs and contribute to the diversity of the financial services industry. A reduction in the Cash ISA allowance would constrain Building Societies’ access to retail savings, which form a critical funding source for their mortgage lending. Such a measure would undermine the stability and competitiveness of Building Societies, to the detriment of consumers and the broader financial ecosystem. (Conclusion, Paragraph 15)
  3. 3
    The Government should not cut the Cash ISA limit in the hope of persuading people... Recommendation · addressed to HM Treasury Recommendation (the committee's words)
    The Government should not cut the Cash ISA limit in the hope of persuading people to move to stocks and shares. Instead, the Treasury must prioritise measures to promote financial inclusion, literacy and awareness and to improve access to advice and guidance, thereby enabling individuals to make informed decisions about their savings and investments. (Recommendation, Paragraph 16)
  4. 4
    The Government should not consider the Cash ISA in isolation when attempting to change investment... Recommendation · addressed to HM Treasury Recommendation (the committee's words)
    The Government should not consider the Cash ISA in isolation when attempting to change investment and savings behaviour. Non-ISA bank accounts make up a large proportion of people’s savings. Savers may also benefit from tax-free savings allowances on interest from these accounts. The Cash ISA is among the most popular and well understood savings products in the UK. Reducing the Cash ISA’s tax-free allowance, and the publicity which would have to go alongside such a reduction, is unlikely to increase the level of saving in shares the UK. It may be more sensible to start any rationalisation of tax-free cash savings by examining the case for the tax-free interest allowance. (Recommendation, Paragraph 17) 12