• 41% of 25-34 year olds with Cash ISAs say a cut in the allowance would impact their ability to put down a home deposit
• If allowance is cut, an estimated 2.5 million say they’d simply save less
• Majority of Brits oppose Cash ISA allowance being cut, rising to 3 in 4 over 55s.
• Nottingham Building Society calls on Chancellor not to reduce the Cash ISA allowance 

Amid speculation that the Chancellor will reduce the Cash ISA allowance in her upcoming Spring Forecast, new research from Nottingham Building Society reveals that savers fear the move will negatively impact their homeownership dreams and retirement plans.

The research, conducted among 2,000 Cash ISA holders, found that a fifth (20%) say it will impact their ability to put down a deposit for a house, rising sharply to four in ten (41%) 25–34-year-olds.

Worryingly, the findings also reveal that one in three savers (34%) fear their ability to save toward their retirement would be impacted, while 36% say it would hit their ability to build an emergency fund and enjoy the peace of mind that comes from a financial safety net.

Separate research the building society has conducted lays bare the scale of the challenges First Time Buyers (FTBs) already face in getting on the housing ladder.

There has been a marked increase in the number of FTBs needing financial support to secure a mortgage over the last year, with a third (31%) of mortgage brokers reporting a rise in multi-generational purchasers pooling resources to fund deposits.  

Cash ISA allowance reduction won’t necessarily stimulate investment

Nottingham Building Society’s research also reveals little evidence that the move would see a surge of money invested elsewhere. Only 38% say they would consider investing more in a Stocks and Shares ISA, while one in three Cash ISA holders – an estimated 2.5 million people – say they’d simply save less*.

The findings unearth a clear public preference for government policies that encourage personal saving. More than half of savers (55%) oppose the reported cut to the Cash ISA allowance, rising to three in four (76%) over-55s who oppose it. An overwhelming 78% of respondents believe the government should be promoting tax-free allowances such as Cash ISAs rather than discouraging them.

In a call to Government to leave Cash ISAs alone, Harriet Guevara, Chief Savings Officer at Nottingham Building Society said, “Cash ISAs are an essential tool for millions of savers across the UK, allowing them to save for key life moments like buying a house or planning for retirement. With economic uncertainty high and the appetite for these products strong, limiting people’s ability to save towards their goals and to build a financial safety net would be the wrong step at the wrong time.

“While we support the Government’s broader efforts to stimulate economic growth and drive investment in UK businesses, there’s no guarantee that reducing the Cash ISA allowance would actually help. What’s worse, there’s real concern that it will simply lead to people saving less. Our research is clear: limiting how much people can put into a Cash ISA won’t immediately lead to a rush into stocks and shares ISAs instead.

“At Nottingham Building Society, we’ve seen significant appetite for Cash ISA products in recent years, including strong appetite for our Digital Fixed Cash ISA which we launched last year. Many of our ISA customers are older, and these findings show that the overwhelming majority of over-55s oppose these plans while a quarter will simply save less if their Cash ISA allowance is cut.

“Cutting the Cash ISA allowance would be a massive blow to millions across the UK. We urge the Chancellor not to restrict this vital savings tool, and to provide peace of mind by confirming as a matter of urgency that the annual allowance will be staying as is.”

*Based on ONS estimates of 7.9 million Cash ISA holders in the UK. https://www.gov.uk/government/statistics/annual-savings-statistics-2024/commentary-for-annual-savings-statistics-september-2024

About the research

• 12,003 UK respondents who have or have previously had Cash ISAs (18+). The data was collected between 20.0225 – 25.02.25 by Censuswide
• 2500 UK respondents currently working as mortgage brokers (18+). The data was collected between 09.01.2025 - 15.01.2025 by Censuswide 

Censuswide abides by and employs members of the Market Research Society and follows the MRS code of conduct and ESOMAR principles. Censuswide is also a member of the British Polling Council.