Healey to Scrap Reeves' Cash ISA Allowance Cut in First Budget, Guardian Reports

Chancellor John Healey is set to reverse predecessor Rachel Reeves' plan to cut the annual cash ISA allowance from £20,000 to £12,000, according to the Guardian. The move, expected in Healey's first budget, signals a shift from a punitive approach to incentivising stock market investment. City experts welcomed the decision, which preserves savers' ability to hold up to £20,000 tax-free in cash ISAs. Reeves had proposed the reduction to channel more funds into UK equities, but critics argued it would hurt savers and fail to boost investment. Healey's reversal is seen as a pragmatic move to maintain consumer confidence while exploring other ways to encourage share ownership. The decision matters for millions of ISA holders and the broader savings market, as it avoids a sudden reduction in tax-free savings capacity. The budget will be closely watched for further measures to boost investment without undermining household savings.