Jonathan Westhoff, Chief Executive, West Brom Building Society commented: “Today’s Budget announcement confirming a reduction in the Cash ISA limit to £12,000 will be seen as a better position than initial rumours a few months ago, especially with over 65s retaining the full cash allowance of £20,000. In truth, however, many will remain sceptical that this change will deliver on the ambition to shift savers to invest in higher risk equity investment. What comes next is somewhat of a step into the unknown and the risk of unintended consequences.”

“A cap without clarity risks confusion. Millions of savers rely on Cash ISAs for short-term security and peace of mind. Reducing/almost halving the limit doesn’t suddenly make them investors; it simply narrows the space in which they can save tax-efficiently.”

“If the government’s ambition is to encourage investment in equities, it must go hand-in-hand with widening access to advice and guidance. Without it, those already uncertain about markets are likely to withdraw rather than reallocate, undermining the very goal of reform.”

“There’s also a broader consideration. Cash ISAs form the backbone of building-society funding, which in turn underpins responsible mortgage lending. Any policy that diverts savings away from these institutions could have a negative impact for home buyers in terms of the availability and or cost of their mortgage.”

“We therefore call on the Treasury to accompany today’s change with, as a minimum, practical plans to bridge the advice gap: simpler routes to guidance, clearer explanations of risk, and support for savers making their first investment decisions. Helping people understand when to hold cash and when to invest would do more for financial confidence than any cap alone.”

“The £12,000 limit may prove workable if it sits within a broader strategy that empowers, rather than pressures, savers. Real resilience depends on choice, confidence, and advice, not on compulsion.”