Budget
richallum
Administrator
@les_cameron & the M&G team have published a really useful summary of yesterday's announcements:
https://www.mandg.com/wealth/adviser-services/tech-matters/government/autumn-budget-2025
Paraplanner. F1, Apple, Nutella, ice cream. No trite motivational quotes. Turning a bit northern.
Comments
Thank you - we try our best!
I'm finding the initial "rules" for Cash ISAs from the recent HMRC newsletter somewhat concerning given the added complexity:
https://www.gov.uk/government/publications/tax-free-savings-newsletter-19/tax-free-savings-newsletter-19-november-2025
"The following rules will be introduced to avoid circumvention of the lower limit for cash ISAs:
These rules will apply to investors under the age of 65.
."
Looks like lower risk investors who may have a proportion in cash-like investments as part of their asset allocation are going to be penalised.
Anyone who's circumstances change, where say an existing stocks and shares ISA may become unsuitable and where a transfer to a cash ISA would be a more suitable solution is locked out from this option (under 65) and has to remain invested in risky investments, or pay an unknown charge on interest generated.
Also, someone in decumulation pre 65 may be impacted as a result if holding any cash element or lower risk portfolio in cash like investments in their portfolio as part of the strategy. It may be that ISAs find themselves down the pecking order when it comes to a regular income pre-65.
I guess we see what comes of the consultation. Any other planning thoughts I've missed?
@Wildparaplanner good comment. I'm just about to meet with Les to plan content for our Online Assembly next week on the Budget and will add this to the list.
Paraplanner. F1, Apple, Nutella, ice cream. No trite motivational quotes. Turning a bit northern.
How is this entire cash ISA limit not clear and obvious age discrimination?
Objective justification...I had the same thought!
PS got AI to dig out the old S&S investment rules and my friendly ISA expert concurred:
Stocks & Shares ISAs under two key rules:
a. Five-Year Rule: As noted, any public debt security (bond) needed ≥5 years to maturity to qualify for the stocks & shares ISA component . For example, a 2-year corporate bond could not be held in a Stocks & Shares ISA (it was deemed too close to cash; only longer-term bonds were allowed).
b. 5% Risk Rule (Five Percent Test): ISA regulations required that an investment held in a Stocks & Shares ISA carry a “credible risk of loss of at least 5% of the capital” . This effectively excluded products that guaranteed capital or were extremely low volatility. If an investment was so safe that it wouldn’t conceivably ever lose 5% in value, it could not be put in a Stocks & Shares ISA – it would instead be relegated to a Cash ISA (assuming the provider offered it) . In practice, this meant things like certain structured deposits or guaranteed-return bonds were not eligible for Stocks & Shares ISAs before 2014.
• Additionally, uninvested cash was not considered a qualifying investment in itself – while you could hold cash temporarily in a Stocks & Shares ISA pending investment, ISA managers tended to require it be for future investment purposes. Pure cash in a Stocks & Shares ISA beyond the short term was discouraged (and as discussed later, any interest on it incurred a tax charge).
Yes I did comment somewhere else that this wasn't really a new thing, just a reinstatement of previous restrictions on cash in S&S ISAs. Pretty sure Osborne threw that lot out.
But the entire policy is mad to start with:
I don't think objective justification is going to be good enough here - for a start there is no obvious defence for the selection of age 65 - SPA perhaps would be better.
I'll be amazed if this doesn't get abandoned before implementation.
Useful stats her for nerds:
https://www.gov.uk/government/statistics/annual-savings-statistics-2025/commentary-for-annual-savings-statistics-september-2025
Those Innovative Finance ISA numbers really do strike home how terrible a solution it is!
> I'll be amazed if this doesn't get abandoned before implementation.
My sentiment exactly!
IF ISA was nothing more than a mechanism to get p2p lending into ISAs when it was looking like becoming a 'mainstream' saving option a decade ago - it was always going to fail and I suspect a lot of people lost capital in these products.
There were also some insane loopholes in the earliest rules, allowing eye-watering levels of interest to be paid by private companies using a 'Director's Loan ISA' - I had one case where the owner 'lent' his own company £67k at 20% p.a. interest!