Chancellor reviewing potential changes to ISA products

Chancellor Rachel Reeves has decided not to change the cash ISA for now. However, she is considering simplifying or scrapping other ISA products, such as the Lifetime ISA and the Innovative Finance ISA, which have faced criticism for their complexity. The Lifetime ISA has a frozen limit of £4,000 since its launch in 2024, and savers face penalties if they withdraw funds for non-qualifying purposes. The Innovative Finance ISA, which allows investment in riskier assets, has not gained popularity due to concerns about returns. Experts are calling for a simplification of the ISA system to make it easier for savers, especially younger individuals. They believe that clearer options could encourage more people to engage with ISAs and improve overall savings rates.