Reform MP Robert Jenrick has issued a stark warning that Rachel Reeves' 'parting gift' to Brits will 'ruin' savers, as HMRC confirms new ISA tax rules set to take effect in April 2027. Speaking on Jeremy Kyle's show on Thursday (June 25), Jenrick lambasted the Labour Chancellor's decision to impose a 22% tax on cash interest held in ISAs, calling it 'absolutely insane'.
New ISA Tax Rules Announced
On Tuesday (June 23), HMRC announced a series of ISA reforms, including a reduction in the annual cash ISA allowance for under-65s from £20,000 to £12,000, effective April 2027. Additionally, all interest earned on cash held within stocks and shares ISAs will now be taxed at 22%, a departure from the previous tax-free status. Investors will also be restricted from holding more than 100% of their stocks and shares ISA in money market funds, which are low-risk investments offering returns similar to cash.
Jenrick's Attack on Reeves
During the interview, Jenrick fumed: 'Only somebody like Rachel Reeves would take a tax-free savings product and apply a tax on it. The parting gift of Rachel Reeves is that she is going to come for your ISA now and apply a 22% tax.' He vowed to fight the decision, stating: 'We're going to fight this every step of the way. I'm going to hopefully raise it in parliament later today and try and put as much pressure on her and on her successor as possible to reverse this decision. There are 20 million people in this country who have an ISA; it's very popular.'
Public Reaction
Viewers took to X (formerly Twitter) to express their outrage. One user wrote: 'Rachel from accounts shows again what a vindictive person she is, pinching money from savers!!!' Another added: 'Seriously, spend your money, folks. Or this Govt will spend it for you!' A third questioned: 'How can they be allowed to do this???' However, some pointed out that taxing interest on cash in stocks and shares ISAs was previously applied from 1999 to 2014 without controversy, and that the new tax does not apply to cash ISAs or investments in stocks and shares ISAs.
Impact on Savers
The reforms are expected to affect millions of ISA holders across the UK. Jenrick's warning highlights the potential financial burden on savers, particularly those who rely on cash holdings within their ISAs. The changes come as part of Reeves' broader fiscal strategy, which has drawn criticism from opposition MPs and savers alike.
