NatWest has contacted customers after changes were announced in this week’s Autumn Budget. Labour Chancellor Rachel Reeves presented her plans for the economy to Parliament on Wednesday.
One key change was lifting the two-child benefit cap from April. It has been claimed this will lift 450,000 children out of poverty but will cost the treasury £2.3bn.
However the MP revealed a range of other hard-hitting measures to plug a financial gap including freezing tax thresholds, introducing a 3p per mile charge for electric cars and charging national insurance on salary-sacrificed pension contributions above an annual £2,000 threshold.
It has also said it will change the limits for some ISAs with savers only able to put up to £12,000 into cash ISAs tax-free each year. This is reduced from £20,000 in the hope people will invest money in stocks and shares ISAs instead. However those aged over 65 can retain the full £20,000 cash allowance.
Following the announcement NatWest has emailed its customers advising them to review their finances. It says: « The government has announced changes to cash ISA limits in the recent Budget.
« While these changes aren’t imminent, now could be a good time to review your financial plans. Whether you want to keep your savings secure or explore investment options, planning ahead could help keep your future goals on track. »
The bank explains the changes which will affect accounts. It says: « Your total annual ISA allowance will still be £20,000, but the way you can use it will change for those under 65:
- You’ll be able to put up to £12,000 in a cash ISA each tax year.
- The rest, up to £8,000, could go into a stocks and shares ISA
- Or, you can choose any combination that suits you, as long as you don’t exceed £12,000 in a cash ISA and your total across both types of ISAs doesn’t go over the £20,000 total ISA allowance
- The annual limit for stocks and shares ISAs remains at £20,000
- For those aged 65 or over, these changes don’t apply. The full £20,000 annual ISA allowance will remain, which can be used across all ISAs
It added: « The changes only apply to new contributions from 6 April 2027 onwards, so you still have this tax year and the next to save up to £20,000 in a cash ISA tax free, if that’s right for you. Any money already saved in your cash ISA from this year or previous years, should stay protected and continue to earn tax-free interest.
« No changes have been made to the Junior ISAs allowance, which remains at £9,000 each tax year per child.
« Separate to the changes announced for ISAs, from April 2027, the income tax you pay on interest received from savings, (over your personal savings allowance and outside of ISAs) will increase to 22% for basic-rate taxpayers, 42% for higher-rate taxpayers and 47% for additional-rate taxpayers. »
NatWest says: « You’ve worked hard to build your savings. Now could be the time to make sure they continue working for you and those who matter most.
« Investing isn’t right for everyone, and it’s important to keep enough cash savings aside for everyday expenses and unexpected costs. But investing has the potential to grow your money over time (typically five years or more) and could help you work toward your long-term goals.
« Keep in mind, investments carry risk. Explore all your options to find what works best for you and your risk appetite. »
