Saver>Investor: “Pitting savings and investing against one another is a fool’s errand”

Saver>Investor: Savings expert Simon Merchant, CEO of savings platform Flagstone on Cash ISA change says “pitting savings and investing against one another is a fool’s errand”

– The Chancellor and her team are taking a step back from the brink and finally listening to what savers are telling them they want from their Cash ISAs.

– A £10,000 threshold is more palatable than the £4,000 cap previously suggested, but it remains a blow to savers and still won’t yield the sorts of results the Treasury and City want to see.

– Pitting saving and investing against one another in this way is a fool’s errand. Just because an individual won’t be able to deposit as much into their ISA anymore is not going to prompt them to opt for investing instead.

– Reinvigorating the UK stock market is an honourable ambition, but penalising savers by reducing their tax-free opportunity if they don’t invest isn’t the answer. In any other situation, wouldn’t this be called holding savers to ransom?

– The Treasury’s theory is flawed because it assumes too much confidence, understanding and risk appetite among savers. None of the evidence points towards a final solution where, faced with a lower Cash ISA limit, savers will just opt to put their money into higher-risk investments instead.

– Savers deserve protection from their government – not pressure to take risks or make financial decisions they don’t fully understand or feel comfortable with. If we want to shake people out of the inertia that persists around their personal finances, let’s do it in such a way that promotes safe, guaranteed value creation.

Consumer research:

(Flagstone / Opinium survey of 4,000 UK adults (including c.1,650 Cash ISA savers), Q3 2025)

Cash ISA savers are concerned about investing over saving:

• 70% of Cash ISA savers say it feels unfair to be expected to take risks with their cash that would usually be perfectly safe in an ISA

• 46% of Cash ISA savers aren’t confident in their ability to make good investment decisions

• 59% worry they won’t be able to access money they’ve invested if they need it

Reducing the Cash ISA limited is unlikely to force a shift to investing:

• Less than a fifth (18%) of Cash ISA savers say they will put surplus cash in stocks and shares ISAs (S&S ISA), and less than a tenth (9%) will invest it outside of a S&S ISA

• Cash ISA savers are more likely to use surplus cash to pay household bills and repairs (11%), reduce their mortgage (11%), or top up their pension (11%), than invest it (9%)

• UK adults are almost twice as likely to have a Cash ISA (41%) than a S&S ISA (22%)