The Chancellor, John Healey, is keeping the annual cash ISA allowance at £20,000, reversing a planned cut to £12,000 for savers under 65 from April 2027.
The cut was announced by his predecessor, the former Chancellor Rachel Reeves, at last year's autumn Budget, Brit Brief reports. That makes the description of this as a reversal accurate. In her Commons reply, Kemi Badenoch thanked Healey for what she called a "U-turn on ISAs", according to the MPA Mag live blog.
Healey also said the Treasury will work with the industry on a new "starter ISA" for first-time investors. He gave no details of it in his speech, Portfolio Adviser reports.
Dame Meg Hillier, chair of the Treasury Committee, said: "The decision to cancel the planned changes to cash Isas is a victory for common sense."
Investment firms are split. Kevin Brown, savings specialist at Scottish Friendly, said: "It's surprising, and hugely disappointing, that the Chancellor has abandoned the planned reduction in the cash Isa allowance." Steven Levin, chief executive of Quilter, told International Adviser: "Stepping back from one unnecessary complication only to introduce a Starter ISA risks replacing it with another."
In the latest annual figures cited by Brit Brief, cash ISA subscriptions grew by 37.5%, or £26.1bn. Stocks and shares ISA subscriptions rose by 19.7%, or £6.1bn.