Cash ISAs may face limit reductions in UK

Chancellor Rachel Reeves will present her spring statement on Wednesday, March 26. This statement is crucial as it outlines the UK government's financial strategy for the next six months. There is a focus on managing the country's economy, which is currently struggling between recession and growth. One major topic of concern is the future of Cash ISAs. These accounts allow people to save up to £20,000 per year without paying tax on the interest. Normally, interest earned above a certain amount is subject to tax. It's important for many savers, especially higher earners who have smaller tax-free allowances. There are rumors that the government may reduce the Cash ISA deposit limit to as low as £4,000 per year. This change could push individuals to invest in stocks and shares ISAs instead. However, recent information suggests that any significant changes to Cash ISAs may not be revealed in this spring statement but could come later in the year during the Autumn Budget. Experts, including money advisor Martin Lewis, have advised against withdrawing funds from Cash ISAs. He emphasized that keeping money in these accounts is wise, especially if a limit change occurs in the future. Lewis warned that withdrawing money now could lead to fewer tax-protected savings later. The spring statement is scheduled for 12:30 PM, following the Prime Minister's Questions in the House of Commons. Many will be closely watching for any news on Cash ISAs and other financial policies.