Rachel Reeves scraps Cash ISA cut plan - days after Martin Lewis intervention on controversial issue - video Dailymotion

Yorkshire Post

Rachel Reeves has scrapped plans to impose a lower limit on how much savers can put in Cash ISAs each year following a backlash against the plans. There had been months of speculation that the Chancellor was going to reduce the current £20,000 tax-free limit on annual deposits into Cash ISAs in a Treasury bid to encourage greater investment into stocks and shares ISAs in a bid to help the UK’s listed companies and boost the economy.  It was also suggested the move could result in better returns for savers as stock market investments typically outperform the guaranteed returns of Cash ISAs in the medium and long-term.  Ms Reeves had said she would keep the overall £20,000 ISA allowance but there was speculation the cash holdings element could be cut to just £4,000.  The idea faced a major backlash from building societies which argued the loss of Cash ISA funds would impact their ability to offer affordable mortgages and loans and financial experts like Martin Lewis, who suggested the plan was a “mistake”.  He said on Good Morning Britain earlier this week: “The reason for doing this we are being told is not to raise tax revenue, it is to try and encourage more young people to invest for their future, which is a good thing they should be doing.  "My problem is this is a form of push economics but actually in reality it's just ‘pee people off economics’, because most people who've got money in savings aren't going to go 'I'm going to have to start paying tax on some of the interest, I'm going to shove it into a risky-based investment’.” Read the full story on https://www.yorkshirepost.co.uk/business

Transcript

00:00Has Martin Lewis just saved the £20,000 cash ICER limit? I think he might have done,

00:07I'm going to explain why. My name's Chris Byrne, I'm Yorkshire Post Business and Features Editor.

00:12Now if you've been following the news recently on cash ICERs, there's been lots of speculation that

00:17next week Rachel Reeves was going to finally announce this kind of long rumoured decision

00:22to cut the amount you could put in a cash ICER from the current £20,000 down to potentially as

00:28low as £4,000 and the idea was that this would encourage more people to put more money

00:35into stocks and shares, stocks and shares ICERs and that would boost the British economy and also

00:41potentially help people get higher returns on their savings. Lots of unhappiness about the idea,

00:50people who like having guaranteed savings from cash ICERs, building societies who say that doing

00:56this would affect their ability to offer affordable mortgages and loans because they rely a lot on

01:02funds from cash ICERs to fund their other activities. But I think there was a particularly

01:09important intervention by Martin Lewis, a very influential financial expert. He said on Good

01:15Morning Britain that his polling on social media shows that more than 80% of people are against the

01:23idea, he said it's particularly unpopular with older generations and he said that while the idea

01:30of getting younger people to invest is good, the government should kind of be pursuing a policy of

01:37greater financial education. So he said that a couple of days later to come out in the wash that

01:43Rachel Reeves isn't going to announce any changes to cash ICERs next week and also what she is going to

01:49announce is going to be pretty much exactly what Martin Lewis has suggested, more financial education

01:55for people about investment. He's one of the voices involved, not the only voice involved,

02:00far from the only voice involved, but I do think it has been a significant intervention.

Rachel Reeves scraps Cash ISA cut plan - days after Martin Lewis intervention on controversial issue

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