Martin Lewis has issued a warning to the 20 million Britons who currently hold a Cash ISA, as major changes to ISA regulations are set to take effect from April 2027. The annual allowance for Cash ISAs will be slashed from £20,000 to £12,000 for those aged 18 to 64, with the remaining allowance directed towards stocks and shares accounts.
The financial expert expressed scepticism about the government's push to encourage more people to invest in stocks and shares ISAs, particularly given the ongoing conflict in the Middle East. In response to a saver's query about whether now is a good time to open a stocks and shares ISA, Lewis advised that for long-term investments of five years or more, timing the market is impossible.
Lewis suggested a strategy called pound-cost averaging to mitigate risk, where investors drip-feed money into a tracker fund over several months. He explained that this approach helps smooth out short-term volatility. The government hopes the changes will encourage more people to invest, thereby supporting business growth, but the new rules will not affect those aged 65 and over.
