{"id":17354,"date":"2025-04-13T19:59:08","date_gmt":"2025-04-13T19:59:08","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/17354\/"},"modified":"2025-04-13T19:59:08","modified_gmt":"2025-04-13T19:59:08","slug":"rachel-reeves-has-declared-war-on-our-cash-isas-at-worst-possible-time-personal-finance-finance","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/17354\/","title":{"rendered":"Rachel Reeves has declared war on our Cash ISAs at worst possible time | Personal Finance | Finance"},"content":{"rendered":"

Reeves began her stint as Chancellor by making mistake after mistake<\/a>, and while the flow has slowed lately we can now add another to the list.<\/p>\n

In the run-up to last month\u2019s Spring Statement, it emerged she was considering cutting the Cash ISA allowance from \u00a320,000 to just \u00a34,000.<\/p>\n

This was always going to be a controversial move.<\/p>\n

More than 10 million Brits have money in Cash ISAs, many of them pensioners who don\u2019t want to put a lifetime of savings at the mercy of the markets.<\/p>\n

They value the safety and certainty of cash ISAs, which help them sleep at night and plan for the future.<\/p>\n

This is especially vital in retirement, when stability is everything.<\/p>\n

Reeves\u2019s plan came just as savings rates hit their highest in years, with Cash ISA savers able to get up to 5% by shopping around.<\/p>\n

The Chancellor\u2019s idea is to nudge savers into Stocks and Shares ISAs and encourage an American-style culture of long-term investing to better support UK businesses<\/a>.<\/p>\n

There’s logic to that. Over time, equities tend to outperform cash. And British companies do need investment, particularly after last October\u2019s brutal Budget.<\/p>\n

But investing isn\u2019t for everyone, and recent events show exactly why.<\/p>\n

What a moment to propose such a change, shortly before US president Donald Trump<\/a> wiped trillions off global stock markets with his trade tariff nonsense.<\/p>\n

Her Cash ISA plan is already unravelling before our eyes.<\/p>\n

This is a frightening moment to be a pensioner, or someone nearing retirement in the next five years.<\/p>\n

Those with their pensions in drawdown or invested in the market have seen values plunge, especially since Donald Trump revived his trade war rhetoric<\/a>.<\/p>\n

I can hardly bear to look at my own personal pension statement. Millions more are in a far worse state.<\/p>\n

Market volatility is extreme. Investor confidence is in tatters. And there’s no sign of respite with Trump going rogue. For older savers, now is a time for caution, not risk.<\/p>\n

Cash ISA savers are sleeping soundly. By contrast, some Stocks and Shares ISA investors and pensioners in drawdown will be sick with worry.<\/p>\n

Simon Merchant, chief executive of savings platform Flagstone, says pushing savers towards the stock market in these turbulent times is \u201cirresponsible, unfair and myopic\u201d.<\/p>\n

He added: \u201cInvesting requires a certain risk appetite. That takes years to build and often fades with age.\u201d<\/p>\n

Reeves hasn\u2019t yet confirmed her plan, but she hasn\u2019t denied it either. So what should savers do?<\/p>\n

It depends on your appetite for risk. Brave souls might see today\u2019s market dips as a buying opportunity.<\/p>\n

Younger savers with regular payments into pensions or Stocks and Shares ISAs should probably carry on. They\u2019ll benefit from buying at lower prices.<\/p>\n

But the golden investment rule still applies: don\u2019t invest money you might need within the next five years.<\/p>\n

Cash ISA fans should use as much of their \u00a320,000 allowance as they can. If Reeves proceeds, it could soon be dramatically reduced.<\/p>\n

It could make sense to act now and lock into long-term fixed-rate savings. Merchant says today\u2019s turmoil could force the Bank of England to cut base rates soon.<\/p>\n

Savers are already rushing to secure today\u2019s high returns, in what he calls a \u201cflight to safety\u201d.<\/p>\n

Flagstone has seen soaring demand for fixed-rate bonds. Leeds and Skipton building societies, for example, are offering Cash ISAs paying 4% a year over three or five years. Just make sure you won\u2019t need access to your money in the meantime.<\/p>\n

Reeves would be wise to reconsider her ill-timed assault on cash in light of today\u2019s stock market meltdown. But don\u2019t count on it. Instead, take action yourself.<\/p>\n","protected":false},"excerpt":{"rendered":"Reeves began her stint as Chancellor by making mistake after mistake, and while the flow has slowed lately…\n","protected":false},"author":2,"featured_media":17355,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[51,3351,32,2074,3126,619,3767,16,15],"class_list":{"0":"post-17354","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-business","9":"tag-cash-isas","10":"tag-donald-trump","11":"tag-pension","12":"tag-pensioners","13":"tag-rachel-reeves","14":"tag-stock-market-volatility","15":"tag-uk","16":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114332432541349434","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/17354","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=17354"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/17354\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/17355"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=17354"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=17354"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=17354"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}