Chancellor John Healey will use the Budget to drop the planned cut to the annual cash ISA allowance, keeping it at £20,000 rather than reducing it to £12,000, the FT reports. The Treasury has not confirmed the change.
The FT report, published on Tuesday 27 October and carried by Reuters, was repeated by the Guardian and the Independent on Budget morning. No cost or start date for the reversal has been reported.
The £12,000 cap was Reeves's plan, set out in Autumn Budget 2025. According to Brit Brief, citing the FT, it was due to take effect from April 2027 for under-65s, with over-65s keeping the current allowance.
City AM says banking shares rose on Wednesday after the report. It expects the move to be welcomed by banks, which are bracing for higher taxes, and by building societies, which rely on ISA deposits to fund mortgages.
Brokers are critical, City AM reports, because they wanted the limit cut further or abolished. Michael Healy, chief executive of IG Consumer, told the paper:
"The Chancellor has squandered a golden opportunity to help British households"