Martin Lewis backs Cash ISA U-turn over £20,000 limit change | Personal Finance | Finance

Money expert Martin Lewis has revealed to his followers that Cash ISA limits may be saved after all. Currently, savers can deposit £20,000 tax-free into ISAs each year, across multiple ISAs in any combination of Cash ISAs and Stocks and Shares ISAs as long as the total amount doesn’t exceed £20,000 across all accounts.

But there has been rampant speculation, not denied by government, that Cash ISA limits could be cut to as little as £4,000 per year after a suggestion from finance firm Fidelity. The thinking was that savers would instead be encouraged to invest their money rather than hoard it in cash, boosting investment in the UK. The mooted proposals had caused widespread alarm among savers who had begun to stash cash in ISAs in preparation for the limit cut next week.

But Money Saving Expert founder Martin Lewis tweeted on Friday morning over reports from the BBC that the Cash ISA limit cut has been cancelled.

Martin called the U-turn ‘a good move’ as he told his followers: “If true, it shows the govt has thankfully listened, to those including me, who have told it the move wasn’t the best way to achieve the stated aim (“to encourage investing not to raise revenue”). A good move.

“Now hopefully it will explore other solutions such as a starter investment Isa to positively encourage people to invest – a carrot not a stick.”

Asked if the limits were never actually going to change, Martin said: “It was certainly under very active discussion. I’ve been asked about my views during commons committee and in private by senior members of govt.”

Reports this morning suggest that strong opposition from banks, building societies and ‘consumer campaigners’ such as Martin Lewis has caused the government to about-face over cash ISA limit cuts.

However, the changes have not been ruled out in future, so it’s possible that limits could still be reduced in future years.

Chancellor Rachel Reeves is expected to announce her plans in her Mansion House speech on Tuesday, July 15.