- Reducing the Cash ISA allowance is the least popular rumoured Budget change among voters, according to new research from AJ Bell*
- Only 12% of Brits are in favour of a reduction to the £20,000 Cash ISA allowance, while nearly half (48%) oppose the change
- The Treasury Committee recently warned that cutting the allowance would add friction and complexity to the system and is unlikely to incentivise Brits to invest
- Increasing income tax is also unpopular, with 48% of Brits stating they oppose an increase to income tax rates
- Just one third (32%) of Brits support an extension to the freeze on tax thresholds
- Introducing a wealth tax has net support but may be difficult to implement in practice
Tom Selby, director of public policy at AJ Bell, comments:
“With an increase to income tax rates now reportedly off the cards, voters will be wary of the raft of other potential tax-raising measures on the table ahead of the Budget. However, the fact a Cash ISA cut comes in just as unpopular as a hike in income tax rates may give Chancellor Rachel Reeves pause for thought on whether such a move is really a good idea.
“Brits clearly do not want to see further restrictions placed on how they save and invest their money. Not only would it be a hugely unpopular measure, but research commissioned by AJ Bell shows tinkering with the Cash ISA allowance would be an ineffective way to promote investing, with more than half of Brits saying that, if faced with a Cash ISA cut, they would simply move their money to a different savings account. It would also add significant further complexity to the system when Labour said before the general election they were committed to simplification.
“In addition, a reduction to the Cash ISA allowance would hardwire the barriers that currently exist between Cash ISAs and Stocks and Shares ISAs. It could also create a scarcity mindset around Cash ISAs, resulting in a ‘use it or lose it’ approach towards contributions under a lower annual limit. Furthermore, the inevitable ban on transfers from Stocks and Shares ISAs to Cash ISAs would create friction in the system and potentially mean those considering a Stocks and Shares ISA worry about being locked into the account.
“Instead, combining Cash ISAs and Stocks and Shares ISAs, the two most popular versions of ISAs in the UK, into a single main ISA product would simplify the overarching ISA framework. This would remove the barrier between cash and investing and ultimately make it easier for people to transition from holding cash to investing and make the most of potential long-term investment growth.”
How unpopular are other rumoured changes?
“An increase in income tax unsurprisingly also falls within the least popular rumoured measures, with only one-fifth (20%) of Brits in favour, while 48% oppose this measure. Recent reports suggest that Reeves will no longer pursue an increase in income tax, though speculation has been mounting for months that the government will continue to boost its revenue through extending the freeze on income tax thresholds, resulting in many being caught by fiscal drag. However, just under a third of Brits (32%) are supportive of an extension to the freeze on tax thresholds. Other unpopular measures include a rise in fuel duty and a reduction to inheritance tax gifting allowances.
“Interestingly, introducing a wealth tax appears to have considerable net support, with over two-fifths (44%) of Brits saying they’d be in favour of a ‘wealth tax’ of some form being announced at the Budget. This likely reflects the fact that the vast majority of people won’t view themselves as the potential target of a wealth tax, meaning they do not believe it is a tax that would hit them in the pocket.
“On the face of it a wealth tax is an appealing idea, but part of the difficulty rests in which assets would be targeted by such a measure. For instance, family homes, pensions and private businesses aren’t always simple to value, and can’t easily be turned into cash to pay taxes. However, excluding certain assets from a wealth tax creates loopholes and a strong incentive to store wealth in anything that’s not subject to the tax.
“A wealth tax may also be counter-productive by encouraging rich individuals to relocate outside the UK, taking their tax revenues and economic contribution with them.
“How the chancellor will decide to raise money for the public finances remains to be seen, but a cut to the Cash ISA allowance is evidently not a measure voters wish to see announced when the chancellor takes to the despatch box on 26 November.”
What the nation thinks of potential Budget changes:
Source: AJ Bell/Opinium. *Based on a nationally and politically representative survey of 2,050 UK adults, carried out by Opinium on behalf of AJ Bell between 23 and 24 October 2025.
