Money saving expert Martin Lewis has given his initial reaction to the new Budget following an exclusive interview with Chancellor Rachel Reeves.
Key Budget Announcements
During her Budget speech, Chancellor Reeves unveiled several significant policy changes that will impact households across the UK. The tax threshold freeze will be extended for an additional three years from 2028, meaning more people will be pulled into higher tax brackets as wages increase.
Other major announcements included the introduction of a 'mansion tax' on high-value properties and the abolition of the controversial two-child benefit cap, which has been criticised for pushing families into poverty.
Martin Lewis's Initial Reaction
While Lewis hasn't revealed the full details of his conversation with the Chancellor, he shared a brief update with his 3.2 million followers on X (formerly Twitter). "On my way back from interviewing the Chancellor did about 15 mins have a 23min on air time tonight and have about 18 mins of budget explainer I want to do," he wrote.
He added: "Slightly worried about the maths, but some really interesting stuff." The full interview will be broadcast on ITV's The Martin Lewis Money Show Live tonight (Thursday, November 27) at 7.30pm.
ISA Changes and Government Strategy
One of the most anticipated announcements concerned changes to cash ISA allowances. In the days leading up to the Budget, there had been speculation that the annual limit could be reduced to as little as £4,000.
The actual outcome saw the cash ISA limit reduced to £12,000, except for savers aged 65 or older. The £20,000 allowance for Stocks and Shares ISAs remains unchanged.
Lewis commented on the logic behind this move: "There's logic in here based on the policy aims. While I would've preferred a carrot, not stick approach – this isn't as bad as it could've been, £12,000 per year is still a reasonable whack for many people."
He explained the government's stated aim was "not to raise revenue, but to encourage young people to invest rather than save – both for the economy, but also because on average it outperforms."
Lewis revealed he had previously discussed this issue with the Chancellor: "When I met the Chancellor on this a few weeks ago, I pointed out that a blanket cut to the limit would be perverse; to cut cash ISA limits for older people to encourage younger people to invest wouldn't work. So, the carve out for over-64s makes total sense and I'm pleased she listened."
However, he expressed some reservations about the effectiveness of this approach for younger savers and emphasised that better investment education and easier access to guidance should accompany such policy changes.
