Martin Lewis issues one-day warning for anyone with a cash ISA

With one day to go until Rachel Reeves announces the Autumn Budget, Martin Lewis has issued urgent advice for anyone with savings in a cash ISA.

It has been announced that the chancellor plans to slash the annual cash ISA limit from £20,000 down to £12,000, nearly halving the amount Brits can save without expecting to be taxed.

As it stands, savers can put £20,000 in their cash ISA with all interest earned completely tax free, regardless of whether they're using an instant access ISA or fixed-rate ISA.

Money saving expert Lewis has warned Reeves against a cut to the savings allowance, insisting the change would 'p*** millions of people off'.

"A cash ISA cut would simply p*** millions of often older people off and I doubt will change the dial on investing," he wrote on X.

"It'd just mean more tax paid on saving, and a problem for building societies raising cash for mortgages."

Reeves previously suggested that cutting ISA allowances would encourage people to invest their money, providing a boost for British businesses, but Lewis is certain this isn't the solution.

"If they [the Treasury] were saying they were doing it to raise revenue, at least that would be logical," he wrote.

"What is needed is for them to encourage investment, better education, and better incentives."

When is the Autumn Budget?

The Chancellor of the Exchequer Rachel Reeves is set to deliver the Autumn Budget Statement in the House of Commons at 12.30pm tomorrow (26 November), just after Prime Minister's Questions.

Martin Lewis' predictions

For a long time, the financial journalist has been calling on the government to make some major changes to Lifetime ISAs, which you can pay a maximum of £4,000 a year into up to the current £20,000 limit.

Speaking last week, he said we might 'finally see some changes' to the LISA in this week's budget.

"Currently, if you try and use your savings to buy a property over £450,000, never mind you don't get the 25 percent bonus, you have to pay an effective fine of 6.25 percent of your money to the state," he explained on X.

"I think one of two things will happen (I've been pushing for them): They get rid of the fine if you're buying a bigger property (so you don't get the bonus, but do get all your money back).

"They increase the threshold to somewhere in the £500,000s (which is where it would be with inflation if it'd increased since 2017 when it was launched). Or maybe both – nah actually – unlikely, only one!"