It was widely expected that the Chancellor would use her Mansion House speech next week to cut the amount that can be saved into cash ISAs from £20,000.
Savers and investors can put £20,000 a year into ISA wrappers, either invested in stocks and shares or squirreled away in cash savings, and the interest or returns are free of tax.
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It has now been widely reported that that while the plans have not been scrapped entirely, they will not be announced next week.
Building Societies and wealth managers have welcomed the delay to any such move.
“We’ve consistently made the case, alongside others across the mutual and building society sector, for maintaining the full allowance, and welcome any decision to consult further with industry rather than rush through damaging reform that would disincentivise saving.”
Building society executives have said that cutting ISA limits could also make it more difficult for the Government to achieve their aim of building 1.5 million new homes.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “This decision makes perfect sense, because it should give the government the chance to see the impact of the other steps it’s taking to boost investment that could really be gamechangers for retail investment.”
The signatories for the letter call the cash ISA, which allows savers to squirrel away £20,000 each financial year without paying tax on the interest, a “cornerstone of personal savings for millions across the UK”.
A Treasury spokesperson responded to the letter by saying: “We recognise the important role that cash savings play in helping households build a financial buffer for a rainy day. Our ambition remains to ensure people’s hard-earned savings are delivering the best returns and driving more investment into the UK economy.”
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