Martin Lewis has addressed rumoured changes to the Cash ISA system (Image: ITVX)
Cash ISAs are one of the most popular savings products on the market right now, giving customers the chance to stash £20,000 away each year without being taxed on it.
But money expert has today addressed speculation surrounding the tax-free savings accounts, after widespread reports that the government is considering axeing or seriously reducing the Cash ISA accounts system over loss of income to the taxman.
Right now, savers can put £20,000 each year into an ISA, or split it across multiple ISAs, totalling £20,000.
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With fears that Chancellor could be looking at cutting Cash ISAs in a bid to boost tax revenue, Money expert Martin Lewis has addressed the speculation with an urgent message for those with money in a Cash ISA.
He posted on X: “A lot of people are asking me ‘what’s the news with ISAs thresholds, are they being cut?’
“The answer is there is no news, there’s lots of speculation written up as news, but absolutely zilch has been announced. In fact I doubt anything has been decided yet (though it is being discussed).
“To those asking should I take money out of ISAs. If there are changes it will almost certainly (nothings 100%) be on how much you can contribute in future. It would be very unlikely to impact any money already in cash ISAs. So don’t do any panic moves, just keep going, nothing has happened.”
Stocks and shares ISAs allow savers to put money into investments without paying Capital Gains Tax on their growth, while Cash ISAs allow savers to put money away without having to pay tax on savings interest.
Most people have what’s known as the Personal Allowance, which allows you to receive £1,000 of interest in a given tax year without paying any tax to . At £50,000 earnings, this is cut to £500, and at £125,000, you lose it altogether.
For those with savings earning 4-5% interest, you could quickly go over the tax thresholds with just £10,000 to £20,000 in a single year, depending on your income bracket, so Cash ISAs are a great way to shield yourself from paying any tax on interest earned beyond that.