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Chancellor Rachel Reeves has been urged not to slash the £20,000 tax-free ISA allowance ahead of her Autumn Budget. On November 26, the Chancellor will unveil her budgetary plans for the next financial year, with speculation once again growing she will target ISA limits. Experts are concerned that Reeves will cut the current limit from £20,000 down to £10,000. Read more: Nationwide £175 current account switch offer sees over 54,000 customers change However, a bank boss has urged her to change the policy in the opposite direction. Danny Haynes, chief product officer at Kroo Bank , said: "We would suggest that, as soon as public finances allow, the tax-free ISA limit should be doubled to encourage saving and investments. "The Bank of England found that over £1trillion of the public’s money is earning less than 2 percent interest – making wealth growth difficult, and harming business success as a result. "This is the primary issue that must be addressed, especially in times of economic uncertainty." He added: "The UK’s economy is in a complex situation, and measures to increase revenue into public finances and boost investment levels in the UK stock market are understandably attractive. "However such significant reforms to two of the public’s most reliable and successful methods of saving risks damaging the very economy that the measures are designed to bolster. "Encouraging investment in UK markets is a vital and commendable aim – but this must be achieved by making such investments as attractive as possible, not by potentially disruptive, enforcing measures. "Savers faced with a reduced Cash ISA tax-free allowance, and a Stocks and Shares ISA that has been stripped of its current freedom from geographical limitations, will simply be discouraged from these tried methods of saving and investing – and will potentially look into riskier, often overseas-based assets as alternatives." In July, Reeves confirmed in a Mansion House speech that ‘further changes to ISAs’ were still being considered in a bid to get ‘better outcomes for UK savers and the UK economy’. She said: “I will continue to consider further changes to ISAs, engaging widely over the coming months and recognising that despite the differing views on the right approach we are united in wanting better outcomes for both savers and for the UK economy.” The FT reports that "a person close to the process said the Treasury was considering a £10,000 annual cash ISA limit, higher than the £5,000 previously suggested by industry figures".
