Cash ISA Reforms Still on the Table as Rachel Reeves Signals Possible Future Changes
A potential change to cash ISA rules remains under consideration as Chancellor Rachel Reeves weighs a broader reform of the savings system. During her Mansion House speech, Ms Reeves confirmed that while she will not immediately scrap cash ISAs or reduce the annual allowance for savers, future adjustments have not been ruled out. Her remarks, which accompanied plans to cut financial red tape, indicate that reforms could still be introduced later despite opposition from savers and smaller financial institutions.
Harps Garcha, Director at Brooklyns Financial, added:
Harps Garcha, Director at Brooklyns Financial, added: “The Mansion House speech by Rachel Reeves on the mortgage market changes brings a more optimistic outlook, with affordability stress rates cut from 8% to just 1% above the Bank of England base rate giving banks greater lending capacity.
"Faster FCA and PRA approval processes are expected to encourage more challenger banks to enter the market, increasing competiton. However, we need to avoid a repeat of the 2008 financial crisis by not relaxing regulations too much like the ring-fencing mechanism.
"Support for small developers to increase housing supply is needed, otherwise property prices will likely continue to rise and worsen affordability. Meanwhile, ISA reforms pushing savers toward stocks and shares could prove risky, especially as many may forgo financial advice due to cost, opting instead for a DIY approach.”
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