The cash ISA limit will be cut from £20,000 to £12,000 from April 2027, Chancellor Rachel Reeves announced in the Autumn Budget, in a move that some expect will open the door for more investments.

While the overall ISA contribution allowance will remain at £20,000 per year, Reeves told Parliament that the £8,000 cut from the cash ISA limit will be available for investments in stocks and shares ISAs.

However, the £20,000 cash ISA limit will be retained after this date for those aged 65 and over.

Chief executive at Scottish Friendly, Stephen McGee, has supported the move to cut the cash ISA allowance, but added that the move didn’t go far enough.

He stated: "It’s encouraging to see the Chancellor take steps to reduce the annual cash ISA allowance, even if we believe she could have gone further.

"The direction of travel is right, but if the Government really wants to shift behaviour and support long-term wealth creation, the cap ideally needs to be set at around £8,000.

"To be clear, we welcome this move. But if the Government wants to truly build a US-style investing culture here in the UK, then it needs to go further."

Partner at White & Case LLP, Johnathan Parry, said that the move is a “helpful measure that adds to the growing momentum of the London IPO market”.

He stated: "It builds on the recent regulatory changes enacted by the FCA and LSE that have levelled the playing field with other leading listing venues and strengthened London’s competitiveness.

"In particular, this measure should support greater retail investor participation in the stock market, boost liquidity, access to capital for companies and bring the UK more in line with other successful jurisdictions with strong cultures of retail investing."

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