Commenting on the Budget, Robin Fieth, Chief Executive of the Building Societies Association said:

“We recognise that the Chancellor has taken time to consider changes to the ISA regime, and are relieved that the reduction to Cash ISAs is less severe than the speculation at the beginning of the year. We are however disappointed that the Cash ISA subscription limit has been lowered. It could also add more complexity, particularly around ISA transfers, and risks damaging the overall ISA brand.

“We welcome the steps taken to support those aged 65 or over. This group of savers could have been particularly affected by a lower subscription limit as they draw down their pensions or look to de-risk their investments. The decision to implement the changes in 2027, rather than rush them through for the next tax year, is also helpful.

"We are concerned about the additional 2% tax on savings interest. It penalises people who responsibly put money aside and build their own financial resilience. Coupled with the cut to the Cash ISA limit it disincentivises a savings culture and sends the wrong message.

" We have always supported the Chancellor’s ambitions to encourage more people to invest when it is right for them. However, the focus should be on helping people understand their savings and investment choices - not on penalising savers or reducing options."

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