On Wednesday 26 November, Chancellor Rachel Reeves’ will deliver her 2025 Autumn Budget.
Reeves has the tough job of having to try and fill an estimated £22bn black hole in the public’s finances, with some even suggesting it’s as big as £40bn.
And with big spending cuts unlikely, it means for many, the reality of higher taxes and potential ISA allowance changes is starting to creep in.
Tax rumours have been dominating Budget talk to date, but ISAs have now jumped back into the financial spotlight following the latest Cash ISA allowance ‘leaks’.
Here’s a roundup of the latest ISA allowance rumours and what they could mean for you.
Will the Stocks and Shares ISA allowance change in the Autumn Budget?
While ISA allowance rumours are swirling, the good news is that right now it doesn’t look like a cut to the overall £20,000 ISA allowance is on the cards.
That means it’s likely that you’ll still be able to shelter up to £20,000 from UK income and capital gains tax in a Stocks and Shares ISA every tax year.
However, while we might not see the overall Stocks and Shares ISA allowance change, we could still see reforms around how the allowance can be split.
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Will Reeves introduce a British ISA?
Rumours of a revival of the British ISA have simmered in the last couple of weeks.
However, the Treasury is still considering ways to get more Brits investing in British companies through their ISAs.
A Treasury official recently said there were still hopes of a “UK element” to be included in any ISA reforms.
Some have suggested we could see minimum holding amounts in UK stocks introduced within the Stocks and Shares ISA, but in reality this would be quite tricky to police.
Others have even called for stamp duty on UK stocks to be scrapped to help make them more attractive.
Whatever ISA changes we do see, if any at all, will hopefully help make investing simpler and more accessible, while encouraging better financial education.
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Could Rachel Reeves cut the Cash ISA allowance in the Autumn Budget?
Just a few weeks ago it was reported the Treasury was considering cutting the Cash ISA allowance. The idea is that taking it from £20,000 to £10,000 would help get more Brits investing, instead of hoarding too much cash.
However, after heavy lobbying from building societies, latest reports now suggest Reeves could take a softer stance and choose to cut the Cash ISA allowance to £12,000 instead of £10,000.
This would still allow savers to keep up to £12,000 in a Cash ISA, but they’d have to find a new home for anything more — putting many in a tricky spot.
That’s because younger savers often use cash to build deposits for things like a first home, while older savers use them to manage short-term spending needs.
Neither group is likely to want exposure to market risk, so reducing the cash limit probably won’t push them toward investing their money.
Cash ISA versus Stocks and Shares ISA: which is right for you?
What can savers do if the Cash ISA allowance is cut?
It’s important to remember that, for now, the Cash ISA allowance cuts are still just rumours and we might not see any changes at all.
But if the Cash ISA allowance does get cut, you can still use any remaining Stocks and Shares ISA allowance to your advantage.
If you want a lower-risk option for your remaining Stocks and Shares ISA allowance, for example, you could consider Money Market ETFs.
Money Market ETFs typically invest in ultra short‑term government debt and other fixed income investments backed by excellent credit ratings.
They can help provide a lower-risk option, while still earning a decent return on your money — and without having to worry about paying income tax on any interest.
The current targeted return for these funds is 4%, in line with the Bank of England’s overnight interest rate benchmark.
What does all this mean for savers and investors?
As we get closer to Wednesday 26 November, it’s becoming clearer that we’ll likely see some change to ISAs and tax, or even both.
That doesn’t mean it’s time to make knee-jerk reactions to all the gossip though.
Instead try thinking about any good financial moves you can make now that will benefit you well into the future, regardless of how the Autumn Budget plays out.
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Important information
Capital at risk. The value of your investments can go down as well as up, and you may get back less than you put in.
Tax treatment depends on individual circumstances and is subject to change. ETF costs also apply.
This content is for information only and is not financial advice. If in doubt you may wish to consult a professional adviser for guidance.