The Building Societies Association (BSA) has warned that any cut to the Cash ISA limit would be counterproductive to the Chancellor's aim of creating a stronger investment culture, ultimately harming savers, the housing market and the wider economy. 

In its Budget submission to the Treasury, the BSA highlights that reducing Cash ISA limits would not encourage more people to invest, but would instead penalise responsible savers, restrict flexibility and risk pushing up the cost of mortgages.

Cash ISAs are not idle money. They meet real and practical needs, helping people to build financial resilience, save for a house deposit or manage their finances in retirement. They also provide the foundation for future investing and supplying essential funding for mortgages and other lending. 

The BSA's analysis suggests that a cut in the annual Cash ISA limit from £20,000 to £5,000 could lead to 17,000 fewer mortgage loans and reduce GDP by around £7 billion over five years, undermining economic growth and tax revenues. 

Andrew Gall, Head of Savings at the Building Societies Association said:

"We are very concerned that the Chancellor is still considering cuts to the Cash ISA limits. 

"We support efforts to help more people to invest and grow their wealth, especially in the UK, but cutting the Cash ISA limit simply won’t achieve this. Instead it would undermine one of Britain's most successful savings products and a stepping stone that has helped millions to build financial resilience and confidence to invest for their future.

"We call on the Chancellor to listen to the millions of people who rely on Cash ISAs to save safely and flexibly. Rather than restricting their options, we should build on what is already working and help people to make informed choices about their finances.”

[ENDS]

You can see the BSA’s Budget submission here

Press contacts:

pressoffice@bsa.org.uk

Notes to Editors

About the BSA

The Building Societies Association (BSA) represents all 42 UK building societies, as well as 2 mutual – owned banks and 7 credit unions. Building societies and mutual – owned banks have total assets of almost £650 billion. They hold residential mortgages of over £485 billion, 29% of the total outstanding in the UK. They also hold over £485 billion of retail deposits, accounting for 23% of all such deposits in the UK. Building societies and mutual - owned banks account for 47% of all cash ISA balances.

They employ around 52,300 full and part-time staff and operate through approximately 1,300 branches, a 30% share of branches across the UK.