London, 7th July 2025 – Smart money app Plum has revealed people’s attitudes towards Rachel Reeves’ plans to cut the Cash ISA. In a survey of 2,000 UK respondents who have opened a Cash ISA, more than two-thirds (68%) think the cap on Cash ISAs should stay at £20,000 a year. Additionally, if Cash ISAs were discontinued, the most popular alternatives for savers would be a non-ISA savings account (37%) or a current account (20%), rather than investments.

When it comes to investing, choosing UK stocks and shares (18%) was a more popular alternative than stocks and shares from outside the UK (12%).

Plum’s customers have also shared their views on ISA reforms and how they will impact their finances, should the government cut the allowance.

Tom Robertson, age 26, an Investment Analyst from Cardiff, said:

"I currently have £5,800 in a Cash ISA. Whilst I'm not saving for anything specific, I plan to use these funds for something big. In total, I put 90% of my savings into a Stocks & Shares ISA and then the other 10% into my Cash ISA. In my opinion, the British ISA (the extra £5k to put into British companies tax-free) was a better idea. I think a Stocks & Shares ISA is such an area of nervousness for so many who limit their saving ability. We already all invest via our pensions, it should be a choice, and I am not a fan of more control from the government, especially on my savings."

Jordan Leith, age 27, Public Affairs Manager from London, added:

"I currently have 10.5k in a Cash ISA, just for rainy days and backup money. I think reforming or phasing out Cash ISAs could be a step in the wrong direction for many savers. ISA accounts offer a safe, tax-free way for people to grow their money without taking on investment risk—something especially important for those nearing retirement or with lower risk tolerance. Removing or limiting them would unfairly penalise cautious savers and could push individuals into riskier financial products they may not fully understand or feel comfortable with. Additionally, introducing a cap on ISA holdings would discourage long-term saving and undermine the principle of rewarding financial responsibility. Overall, these changes could erode trust in the UK’s savings system and make it harder for people to plan for their financial futures with confidence. Not everyone is comfortable with investing in the stock market, especially those who are risk-averse, nearing retirement, or just starting out with saving. Cash ISAs offer peace of mind, knowing your money is safe and growing tax-free, even if the returns are sometimes modest."

Founder and CEO of Plum, Victor Trokoudes, said:

“These reported reforms would be all stick and no carrot. Our research found that if the Cash ISA allowance is to be reduced, the most popular alternative option is to hold this money in a cash savings account, followed by a current account rather than investing. Given the effects of fiscal drag from frozen tax thresholds, more people would then be at risk of paying tax on their savings as they exceed their respective allowances. It would be harsh to punish people for saving in these circumstances.

“For those who do turn to investing with the ambition to secure higher returns, there is no guarantee that they would put their money into British companies, as Rachel Reeves is hoping. We find our ISA customers who currently invest often make logical investment decisions based on what is performing well and companies they know already – unsurprisingly, this means a larger allocation to the US or our Global Tech fund, which is dominated by the largest American tech companies. Additionally, like with any investing, the value of their money could go up as well as down, so it is unfair to drive responsible savers into riskier choices in this way, especially when there is no guarantee it will support investment in UK businesses. 

“We fundamentally believe in giving people choice over how they make their money work for them. Rather than reducing the Cash ISA allowance, we’d like to see a boost to stocks & shares ISAs, perhaps by raising the £20,000 allowance, to encourage more people to invest without penalising people who prefer to take on less risk. Alternatively, the Government can continue to pursue changes to pensions to support investment here in the UK, as the market potential is huge. 

“Fundamentally, many people saving into a Cash ISA simply do not want to take on the risks of investing, be that due to their low financial confidence or a hesitance due to lack of knowledge. So, addressing these barriers first is crucial to help ensure people take the right steps for their circumstances to build their financial resilience. 

“It’s essential that the government takes a broader view to Cash ISA reforms and how any reforms will impact. Ultimately, this shouldn't be a snap decision but a carefully considered one, informed by a broad range of views and expertise. Most importantly, savers’ interests need to be at the heart of any decisions.”

ENDS

About Plum: 

Plum is the ultimate smart money app, helping two million people to invest, save and manage their spending with automation. Founded in 2016 by Victor Trokoudes (ex-Wise), Plum automates parts of personal finance that people find difficult or don’t have time for, with effortless saving, empowered spending and accessible investing. Plum has helped over 2 million customers across Europe do more with their money, with more than £2 billion set aside via the app. Plum was named Best Personal Finance App at the British Bank Awards 2023 and was named one of the fastest-growing companies in the UK by the Deloitte Technology Fast 50 2023. Plum is headquartered in London, UK, and has offices in Athens, Greece and Nicosia, Cyprus.