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?

The fact is the money has to be raised somehow.

and when you’ve tanked the economy you force the people to do it as the businesses no longer exist.

Give it a rest Kemi.

Whatever she does cannot possibly be as disastrous as 14 years of Tory governments were for my savings and investments.

You can do what you like within the rules (as always). You can also get £1k tax free from taxable savings. There are also IFISAs that you can get £20k allowance if you are more adventurous. Or put in in your pension pot if you have excess savings.

I thought it quite likely they would get rid of ISAs altogether, all that interest going untaxed... So was actually relieved. An awful lot of people can't get anywhere near the £12k a year savings anyway.

So this is another tax panic thread from EABT that is actually misleading?

This government is the gateway to Reform getting in, so slow hand clap all round.

What is this - a 'Spot the Disgruntled Tory' competition?

Yep, yep it is. I certainly hate this government that’s for sure. Most people do.

Exactly. You can have as much cash in savings accounts as you want. You just have to pay tax on the interest. Shocker.

If you’re desperate to keep cash in a stocks and shares isa, just invest in a money market fund, there is a royal London one that yields about the same as the base rate. It’s not difficult.

It was the Tories who tanked the economy. Do the names Cameron, Johnson and Truss mean anything to you?

Labour are sweeping up the shit they left behind.

When all the redundancies start to kick in I’ll be very interested to see the mood shift on here.

600 job losses at Sussex university was being discussed last night. People are turning away from further education due to student loan debt and the shift in AI. That’s just one sector that will start to disintegrate, It’s going to take three years for AI to really be felt in terms of job losses so people sure going to REALLY need their savings.

How? The ISA allowance applies to both S&S and cash ISAs. You can’t put 20k a year in both

The only loophole is banks using cash ISAs as a way to get out of paying cautious customers the market interest rate.

Your argument in the opening post was that RR was hoping to get people to invest in the stock market so money was going into UK businesses. So surely encouraging investment is aiming to improve the economy in the long term and provide funding for new businesses?

The cash ISA limit is going down to £12k but the S&S limit remains at £20k.

I hope youre right. Honestly I do.

The only concerning part of this is them demonstrating they will tinker with ISAs / make them non tax free wrappers.

That is worrying for the future of the ISA as a tax free wrapper / at the value currently set for annual contributions.

Im amazed the limit was £20k in the first place - if introduced today, I’d assume meltdown at it being a perk for the rich. Anyone remember the response when it was introduced?

Yes! I remember them coming in and they were encouraging people to save as they were concerned people were spending too much.

People are often advised to invest in global trackers, there are UK trackers but if you want to spread your risks you may not want to be over exposed to the UK markets.

Of course now people feel so anxious and unsafe that they are hoarding money and they hate that too.

If you can afford to save more than £1k a month (ie max out the £12k cash allowance that was announced in the budget, so not news at all) then you are significantly better off than most of the population.

Arguably it is foolish to keep the full £20k in cash, as you will be better off in the long run if you invest anything you don’t need in the next 5 years, so while this policy is unlikely to achieve the aim of investing in the UK, it might nudge more people into investing full stop.

We really need more financial education in this country, and scaremongering about RR coming for your savings doesn’t help.

They were introduced in 1999 (so by the Labour government) although the cap was £3k cash and £4k stocks and shares at the time. The limits were increased during the 2010s (i.e. by the Conservative government).

en.wikipedia.org/wiki/Individual_savings_account

Most people can't invest. We have to save for emergencies like boilers and cars.

My teen is saving for a house, he can't risk that dropping in the next five years.

I think this sounds right. It hadn’t occurred to me you could use your S&S isa as a means of holding cash!! Does sound like a loophole not in spirit etc
Learn something new everyday

Why would anyone have a load of cash parked in a S&S ISA anyway?

I have £6.64 cash value in my S&S ISA. The rest of my money in there is invested in funds. That’s the whole point of them, no?

This isn’t a new tax. ISAs are a form of tax relief and it’s reasonable for the government to choose to incentivise investing over saving. It’s better for the economy.

So is this thread really about you feeling anxious about your finances because you have lost your job? Because I think many of us can empathise with that. The problem is much deeper and complex than the current UK government potential changes to ISA taxation though.