Members of the public have expressed fury over a proposed tax on Individual Savings Accounts (ISAs) introduced by Chancellor Rachel Reeves and outgoing Prime Minister Sir Keir Starmer. The plan will reduce the amount that can be saved tax-free in an ISA and impose a 22% tax on interest from cash held in Stocks and Shares ISAs. Under the new rules, from April 2027, individuals under 65 will only be able to save up to £12,000 per year in a Cash ISA, down from the current limit of £20,000.
Public backlash against the ISA tax change
Reaction to the announcement has been overwhelmingly negative, with many savers accusing the government of taxing every aspect of financial life. One person fumed: 'Work? Taxed to oblivion Sell? Taxed to oblivion Buy? Taxed to oblivion Die? Taxed to oblivion And now… save? Taxed to oblivion There is no point doing the right thing any more in the UK.' Another added: 'We’re being led by horrific, spiteful morons. Labour has announced that, from April 2027, interest on cash in Stocks and Shares ISAs will be taxed at 22%, and under-65s will only be able to put £12,000 a year in a cash Isa, down from £20,000.'
Impact on savers and the economy
The new tax applies to interest earned on cash held within Stocks and Shares ISAs, which was previously tax-free. A third critic raged: 'I told you, the looters are coming after everything: Your income. Your savings. Your business. Your future. Your kids' future. Your ambition. Your happiness. Your soul.' According to government guidance, 'The new cash ISA limit for those under 65 will be £12,000. The limits for Innovative Finance ISAs, LISAs and Stocks and Shares ISAs will remain the same. Investors will still be able to hold cash in a non Cash ISA, but any interest paid on the cash holding in a non Cash ISA will be subject to 22% charge.'
Broader context of tax changes
The ISA reform is part of a wider set of fiscal measures that have drawn criticism. One commentator noted: 'The more I think about this the angrier I get - work your a*** off to give loads of it away in tax. Do the responsible thing, save up - just to give loads of it away in tax. And what do you get to show for it? Just more people with their hand out, demanding more money from you.' The changes are expected to take effect from April 2027, leaving savers with limited time to adjust their financial planning.
