While the personal finance landscape remains “in a state of flux” after Rachel Reeves’s Spending Review, Cash ISA savers have been urged to “stay nimble”.
Myron Jobson, senior personal finance analyst interactive investor said: “Stay nimble but not reactionary. Making full use of available tax wrappers, such as ISAs and pensions, remains one of the most effective ways to protect and grow your wealth.” However, he warned: “But it’s equally important to avoid knee-jerk decisions based on speculation that could have long-lasting financial consequences. A measured approach is the best defence against the uncertainty that continues to define the current personal finance landscape.”
Mr Jobson noted that, while the latest Spending Review, which the Chancellor announced on Wednesday afternoon, promised sizeable investment across critical sectors, the personal finance landscape remains “in a state of flux.”
He said that changes to the ISA regime, inheritance tax, and pension rules “are all in the pipeline”, and the U-turn on cuts to the winter fuel payment signals “the piecemeal nature of support measures.”
Earlier this year, Ms Reeves confirmed that the Government has no plans to cut the ISA allowance, following widespread criticism sparked by rumours of a potential reduction from £20,000 to £4,000.
However, Ms Reeves has indicated that changes to how ISAs function may still be on the cards, though the specifics remain unclear.
In an interview with the BBC in May, Ms Reeves said: “I’m not going to reduce the limit of what people can put into an ISA, but I do want people to get better returns on their savings, whether that’s in a pension or in their day-to-day savings. And at the moment, a lot of money is put into cash or bonds when it could be invested in equities, in stock markets, and earn a better return for people.”
However, Mr Jobson argued: “The constant state of change can make it difficult for people to plan with confidence, particularly around long-term goals like retirement. Stability is vital to enable effective and proactive planning.”
He added: “A measured approach is the best defence against the uncertainty that continues to define the current personal finance landscape.”
The autumn Budget is usually announced in October and November, but the official date this year is yet to be announced.
