In a bid to encourage savers to boost the economy by placing their money in investments, the UK Treasury is considering limiting or eliminating Cash ISAs.
The government has previously refused the idea due to the popularity of Cash ISAs being a result of their limited risks. For most people, Cash ISAs are the best way to save money tax-free, with around £285 billion sitting in these accounts in the UK as of last year.
However, the Chancellor, Rachel Reeves, has warned of the lack of productivity these accounts cause and has refused to deny changes to Cash ISAs following a meeting with the UK Treasury. She is not due to make a statement until her Spring Statement on March 26.
The Bank of England recently reduced its growth forecast by 50% to 0.75 in 2025, and so this could mean a changing tide for the outlook of growth in 2025.
However, around 22 million Britons, as well as many small and medium business, have Cash ISAs holding an average of thirty-thousand pounds. These accounts escape all tax up to £20,000 for free and without risk, making them a reliable account for holding cash. Also, Stocks and Shares accounts are geared towards long term investments and the money they hold can lock up capital.
At AJL Finance, we offer tailored and completely open advice on stock finance for SME business loans, so your business can adapt to potential new policies whilst also being able to release equity or borrow to continue successful trading.
