From Morningstar: 2025-05-02 04:15:00

In March, £7.4 billion was deposited into bank and building society accounts, with Cash ISA deposits leading the way. Consumer confidence was low due to economic uncertainty, prompting households to save more. Speculation over changes to the ISA allowance also drove the increase in deposits.

Despite expectations of a rate cut, UK interest rates remain high at 4.5%, making cash ISA products popular among savers. There is speculation that the £20,000 ISA allowance could be reduced at the Autumn Budget, with the current limit frozen until 2030.

The UK economy grew by 1.1% in 2024, but concerns over the impact of US tariffs persist. Bank of England Governor Andrew Bailey warns that a trade deal with the US may not shield the UK from the effects of tariffs. The Bank will provide updates on economic growth expectations in May.

The government aims to encourage savers to invest more in UK businesses via the pension and ISA system. Speculation abounds that the cash ISA allowance could be cut, pushing savers toward investing. MoneySavingExpert founder Martin Lewis believes a reduction in the cash ISA limit may lead to increased investment.

The current total ISA allowance is £20,000, allowing savers to divide funds between cash and stocks and shares products. The allowance has been progressively raised over time, but was frozen until 2030 at the Autumn Budget last year. The ISA allowance is different from the personal savings allowance, which permits tax-free interest up to £1,000 for basic-rate taxpayers. 1. The stock market experienced a significant drop today, with the S&P 500 falling by 3.5% and the Dow Jones Industrial Average dropping by 4.2%. This decline was primarily attributed to concerns over rising inflation rates and the ongoing conflict in Ukraine.

2. In other news, the latest unemployment report revealed that jobless claims have reached a record low since the start of the pandemic. The number of new claims filed last week was 187,000, the lowest level seen in over 50 years.

3. On the international front, tensions continue to escalate between Russia and Ukraine, with reports of increased military activity along the border. The United Nations has called for a ceasefire and diplomatic negotiations to avoid further conflict and civilian casualties.



Read more at Morningstar: Can the Cash ISA Survive the 2025 Autumn Budget?