Money saving expert Martin Lewis has delivered a stark verdict on the Labour government's autumn Budget, strongly criticising a significant reduction to the cash ISA allowance.
What are the new ISA rules?
In a major shift for UK savers, Chancellor Rachel Reeves announced that the annual subscription limit for cash ISAs will be reduced from £20,000 to £12,000. This change, revealed on Thursday 27 November 2025, is part of a broader strategy to incentivise investment.
Critically, the allowance for stocks and shares ISAs will remain at its current £20,000 level. The government has stated the policy is designed to encourage younger people to invest for the long term rather than relying on cash savings. Individuals over 65 years old will be exempt from the new, lower cash ISA limit.
Expert criticism of the 'stick approach'
Martin Lewis, the founder of MoneySavingExpert.com, did not hold back in his assessment, labelling the reduction the 'wrong move'. He argued that the government should be focusing on better financial education and creating positive incentives for investing, rather than using what he described as a 'stick approach' against cash savers.
While Lewis conceded that the new £12,000 limit remains relatively high and would require substantial monthly savings for most people to maximise, he maintained that the principle of cutting the tax-free savings allowance was misguided.
Industry calls for a rethink
The criticism was echoed by other leading figures in the finance industry. Tom Selby, director of public policy at investment platform AJ Bell, expressed deep concern about the reforms.
He urged the Chancellor to reconsider what he called 'ill-thought-out' changes and to gather proper evidence on what effective, long-term ISA reforms should look like before implementing such a significant policy shift.
The move has placed a spotlight on the new government's financial strategy, signalling a clear intent to shift the public's savings behaviour, but facing immediate resistance from some of the UK's most trusted financial voices.
