New rules around cash ISAs were set out at the Budget
Rachel Reeves(Image: PA)
Pensioners have been sent some welcome news regarding cash ISAs.
Rachel Reeves set out new rules around the bank accounts at the Budget, dealing a blow to savers.
However, it’s been confirmed that over-65s will be protected from the changes.
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For everyone else the £20,000 cash ISA limit is being reduced to £12,000.
But crucially, those aged 65 and over will still be able to put up to £20,000 a year into accounts, as is currently the case.
The changes announced by the Chancellor will come into force from April 2027.
The aim is to encourage more households to invest in stocks and shares to boost the economy, rather than just put their cash away in savings.
Money Saving Expert explained: “Currently, you are able to contribute up to £20,000 each tax year into a cash ISA (or you can split this allowance between other types of ISA).
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“However, the Chancellor has confirmed the cash ISA limit will be reduced to £12,000 a year from April 2027.
“The Government hopes the change – the first cut to the cash ISA allowance since 2017 – will encourage more people to invest in stocks and shares instead.”
They added: “Aged 65 or older? There will be no change. The £20,000 cash ISA contribution limit will continue to apply.
“Aged 64 or under? Your cash ISA limit will fall to £12,000.
“This will only apply to new contributions you make from April 2027. It won’t have any impact on savings you’ve already contributed to a cash ISA up until this point.”