SNP urge UK chancellor Rachel Reeves not to cut tax-free allowance for ISAs

The SNP has urged the chancellor not to cut the tax free allowance on cash savings accounts.

Reports have suggested Rachel Reeves could announce the measure next week, dropping the threshold from £20,000 for cash individual savings accounts (ISAs).

Suggestions of the shift have raised concerns among banks, while consumer finance expert Martin Lewis claimed it could match up to other unpopular decisions taken by the Labour administration in the past year, including the cut to personal independence payments (PIP) and the winter fuel payment.

SNP economy spokesman, Dave Doogan, said the move could “clobber” 1.3 million people in Scotland who have cash ISAs.

“Rachel Reeves seems determined to make this Labour Government one of the least popular in history with its austerity cuts and tax hikes hitting every part of society and leaving families worse off,” he said.

“First, the Labour Party went after pensioners and disabled people with their winter fuel and disability cuts, then they went after farmers and small businesses with their tax hikes, and now they are coming after millions of hard-pressed families who are simply doing their best to save for their futures. They are totally out of touch.

“People are sick to the back teeth of this Labour government making it harder for people to get by.

“Under Keir Starmer, Brexit Britain is already suffering from soaring living costs, poor wages and a personal savings crisis.

“The UK Government should be helping people not launching another Labour Party tax grab – and dipping their fingers into people’s life savings.

“This blow to savers is already proving to be deeply unpopular with voters and, as consumer champions like Martin Lewis have warned, it could be another winter fuel and PIP level controversy for millions of families who are angry with this out-of-touch Labour Government.”

Research commissioned by the SNP by the House of Commons Library on the issue found 30% of Scottish adults reported having a cash ISA.

Those accounts, as of April 2022, have a total market value of £52.7bn, an average of £32,917 per account.

The UK Government has been contacted for comment.