Martin Lewis issues urgent warning to anyone with a cash ISA as speculation mounts

Martin Lewis has encouraged cash ISA savers to "keep going" as usual, despite rumours that Rachel Reeves is facing pressure to overhaul the popular savings scheme. A cash ISA permits you to save up to £20,000 each tax year, with any interest earned being entirely tax-free.

According to Bank of England data, 2024 was a banner year for cash ISAs, with savers depositing nearly £49.8 billion into these accounts.

This surge in savings comes as interest rates have improved, putting savers at greater risk of having to pay tax on the interest they've earned from their hard-earned money. Basic-rate taxpayers can earn £1,000 in savings interest each tax year before tax is due, reports the Mirror.

The threshold drops to £500 for higher-rate taxpayers, while additional rate taxpayers receive no allowance. Interest would be payable on the earnings from your savings once these thresholds are exceeded.

In a post shared on X/Twitter, Martin Lewis reassured savers that no changes to ISAs have been announced. There's speculation that Ms Reeves is being pushed to scrap or reduce the cash ISA tax-free savings allowance, but the Treasury has yet to confirm any such plans.

Martin Lewis stated: "There is no news, there's lots of speculation written up as news, but absolutely zilch has been announced."

The well-known financial advisor offered some calming words amidst the recent speculation, saying: "In fact I doubt anything has been decided yet (though it is being discussed). To those asking should I take money out of ISAs. If there are changes it will almost certainly (nothings 100%) be on how much you can contribute in future. It would be very unlikely to impact any money already in cash ISAs. So don't do any panic moves, just keep going,