Politics

Rachel Reeves Sparks Outrage Over Plans That Could Hit Savers Where It Hurts Most

Published on July 1, 2025

There’s growing tension over reports that Chancellor Rachel Reeves is gearing up to cut the annual tax-free limit on cash ISAs, and Reform UK’s Zia Yusuf is not holding back.

Word is, Reeves is preparing to unveil a major shake-up of the ISA system in her upcoming Mansion House speech, and it’s got savers seriously worried. The current £20,000 annual tax-free limit could be slashed under her new plans. The goal? Encouraging people to move their money from cash into stocks and shares to give the UK economy a bit of a push, reported the Express.

But not everyone’s convinced that punishing cautious savers is the right approach. Zia Yusuf, who heads up Reform UK’s Department of Government Efficiency, made his opinion crystal clear. Taking to X, formerly Twitter, he said: “Unbelievably stupid from Reeves. Punish the segment of society who are actually saving so they won’t be a leech on the state. She is the worst Chancellor of all time.”

Strong words, but he’s definitely not alone in thinking it. The backlash is growing, especially from those who’ve relied on cash ISAs to stash away savings without risking the ups and downs of the stock market. For many, cash ISAs are a safer, simpler way to grow their money, and this potential change feels like a slap in the face for doing the responsible thing.

Reeves hasn’t officially confirmed the cut yet, but she didn’t deny it either. When pressed about it last month, she said, “I do want people to get better returns on their savings, whether that’s in a pension or in their day-to-day savings.” That statement has left a lot of people reading between the lines.

To add to the confusion, Reeves did previously say she had no intention of reducing the total amount that can be paid into ISA products overall. But now, all eyes are on whether that means she’ll simply juggle things around – reducing the cash ISA portion while possibly leaving investment limits intact.

A Treasury source chimed in, saying the Government is “looking at options for reforms to ISAs that get the balance right between cash and equities.” That sounds like changes are very much on the table, and not just cosmetic ones.

If Reeves goes through with this, it’ll be the biggest shake-up of ISAs since they were first introduced in 1999. Supporters of the change argue that more investment in stocks could help inject life into the economy. But critics say it’s reckless to nudge risk-averse savers into something they’re clearly not comfortable with.

Right now, people are just trying to make their money go further, and many feel like they’re being squeezed from every direction. Cutting the cash ISA allowance could make them feel even more punished for doing the right thing. And if that’s the message being sent, Reeves may find herself with a bigger backlash than she bargained for.

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