Hold onto your hats, rumours swirling that Rachel Reeves is looking into ANOTHER tax and if you have savings .. she might be coming for you.

[EvangelicalAboutButteredToast]

Yep, it’s another Labour tax! I know everyone felt very positive about the last one I posted: proposed tourist tax to make your staycations potentially more expensive on top of her also targeting holidays abroad by increasing air passenger duty plans to charge 20 per cent VAT on the fees airports charge airlines for using runways and terminals which will of course be passed onto customers.

Now for the savers.

Rumours are circulating that Chancellor of the Exchequer Rachel Reeves is planning to impose a new 22% charge on interest earned from cash held in a Stocks and Shares ISA from April 2027.
While nothing has been confirmed yet, here’s what could change and what it could mean for you.
What is the proposed 22% charge on cash in a Stocks and Shares ISA?
Currently, any cash you hold inside a Stocks and Shares ISA, whether that’s uninvested money sitting on the side or interest earned from cash-like products, is completely tax-free.
But now that could be about to change.
Reeves is reportedly planning to impose a 22% tax charge on any interest earned from cash held inside a Stocks and Shares ISA, starting from April 2027.
Following the Cash ISA allowance cut from April 2027, announced in the 2025 Autumn Budget, the government wants to stop savvy savers from parking their cash inside a Stocks and Shares ISA to dodge the new Cash ISA limits (more on those below).
However, this isn’t entirely new ground.
Before 2014, a 20% charge applied to cash interest inside Stocks and Shares ISAs. The new proposal would bring that back — only this time at 22%, in line with the incoming savings interest tax rate change from April 2027.
Why is Rachel Reeves changing the ISA rules?
The government thinks the UK general public saves too much and invests too little.
Compared to other G7 nations, British households have historically kept a much larger portion of their money in cash savings rather than putting it to work in the stock market.
Reeves wants to change that and turn us into a nation of investors, rather than savers.
And she’s hoping that with more retail investors, it will mean more money flowing into UK businesses, driving growth and boosting tax receipts.

https://blog.investengine.com/rachel-reeves-tax-cash-in-stocks-and-shares-isa/

Was also being discussed on LBC This morning. Everyone still happy?

And no I’m not a bot, a shill, a troll or a Reform voter. Just a very tired middle aged woman who now has no job due to huge Labour budget cuts in the Education sector. Thanks Rachel 💐

Interesting. I agree that encouraging investment in UK Plc is a good thing but I’m not sure this is the right way to do it. More than anything it just seems like a hassle for the taxpayer!

Thanks for the "heads up" - I swear I saw the curtains twitch and now I'm peering out the front window to see if she might be on the porch. DH saw your thread title and has hidden under the tea cosy; didn't even RTFT, poor thing!! 🫣 🎩

Pmsl 🤣. Your post helped.

We do have money in stocks and shares ISAs that completely tanked when Trump attacked Iran and has clawed its way back up again. This news might be enough to make us just take it out and pay off the mortgage as I can see she is going to be coming for savers next.

Isn't it just in uninvested money - to close a known loophole?

Yeah I genuinely feel the stock market is too volatile to invest much in. Taxing my cash isa interest won’t change that. 🤷🏻‍♀️. Don’t really know what else to say apart from I’m sick of it all. I like the security of my cash isas because I feel my job is precarious. I feel I’m too old now to start investing in stocks. I’ll be retiring in ten years , possibly made redundant before then. Can’t risk it all plummeting.

Your cash isa will be fine. It is cash kept in a stocks and shares isa that will be taxed on the return

Hang on.
They are letting people put more into a S&S isa because long term they do better.
Keeping cash in a S&S isa isn't in the spirit of that.
Seems like she us closing a loophole, not 'coming for' people with savings.

Yes, exactly this. No need to panic unless you are keeping uninvested cash in your stocks and shares ISA.

The devil is in the detail and it’s currently money that sits outside invested money, but read the rhetoric and direction of travel. She wants to force savers to become investors so she is coming for savers.

Just trying to stop people getting around the new rules, if the money is meant to be in an S&S ISA that is where it should be, keeping it as cash is just deliberately getting the £20k ISA allowance but actually holding it as a cash ISA which has a lower limit of 12k (for most people).

ISA’s are a tool for government to manage behaviour - they are trying to encourage investment in the economy. I don’t have a problem with that.

You can still save it will just be taxable. and 12k pa cash ISA is still generous

Yes exactly, that is why they changed the rules if you want the full £20k you have to put at least £8k in S&S ISA, which theoretically at least should give a better yield than a cash ISA over a number of years. I guess many people don't realise they are likely to be much better putting their savings into S&S so it is a not so gentle hint.

You can still save it will just be taxable. and 12k pa cash ISA is still generous

You’re right, I do feel truly blessed. Sorry Rachel.

I thought they wanted people to put their money in s&s ISAs? This will just put people off

So you’re happy that people are being coerced into what they do with their money? I know we are constantly being corralled into behaviour change by authority but I’m always so surprised when no one challenges it.

How much cash do people need? You can put £12k per year in a cash ISA (£20k if over 65), £50k in Premium bonds, and earn £1,000 interest on savings before being taxed (or £500 if a higher rate tax payer) so that's another £20k or £10k if interest is 5%. All tax free.

Andy Burnham is also set to shake up council tax if he gets in, so be prepared for that coming down the pipeline too. My advice is pay off your mortgage as soon as you can as it will be more profitable to move savings into paying off debt.

But if its uninvested surely you don't earn any interest to be taxed? Or do you? I didn't know this if it's a loophole.

Well having just lost my job I’m going to say I am VERY grateful for the savings I have. How much do I need? I think the general advice is four months worth of bills in the bank.

They want people to invest. They changed the cash ISA rules, but people just put cash in S&S ISAs instead - leaving it as uninvested cash as a way to get around the cash ISA limit. Thats what this would be designed to stop.

No, you can

You must have very high bills if they are over £72,000 every 4 months 🤣

Hilarious.

No one's stopping you from doing anything, the govt is just taxing what are essentially some savings accounts. You can hide it under the bed if you want.

The fact is the money has to be raised somehow.