“Savers deserve choice”: Nottingham Building Society urges Chancellor to protect the Cash ISA

• Nottingham Building Society warns that halving the Cash ISA allowance would send the wrong signal to savers at a time when financial confidence is already fragile.
• New research shows two fifths (44%) of savers don’t save regularly, and almost half of over-60s (47%) prefer Cash ISAs, highlighting the need to protect simple, trusted ways to save.
• Two thirds of Nottingham Building Society fixed rate ISA customers used their full £20,000 allowance in the year to date, up from three in five last year, underlining how vital the current limit is for ordinary savers. 

With growing speculation that the Chancellor could halve the annual Cash ISA allowance from £20,000 to £12,000 or £10,000 in this month’s Budget, Nottingham Building Society is calling on the Government to protect savers’ choice and to back the mutual model that underpins financial resilience for millions of UK households. 

The building society warns that cutting the Cash ISA allowance would send the wrong signal to savers at a time when financial confidence is already fragile. New research reveals that two fifths (44%) of UK savers do not save money on a regular basis, while almost three in five (57%) say they are not saving more than they did last year, evidence that many households are already struggling to build financial resilience. 

At the same time, 37% of savers say they feel most comfortable saving in a Cash ISA, rising to almost half (47%) of those aged 60 and over, highlighting that Cash ISAs remain one of the most trusted and accessible ways to save. By contrast, fewer than one in five (18%) currently hold a Stocks & Shares ISA, demonstrating that most savers are not yet comfortable taking on investment risk or have different needs and risk appetites. 

Internal data from Nottingham Building Society shows that 71% of its digital fixed rate ISA customers used the full £20,000 allowance in the year to date, up from 61% in 2024. Across both digital and branch savers, two thirds (66%) used their whole allowance, underlining how vital the current system is for ordinary savers.

The call comes as the Government reviews ISA policy and the Labour Party continues to emphasise its ambition to double the size of the UK’s mutual sector, which Nottingham Building Society warns could be undermined if savers are discouraged from putting money into mutuals. ISAs held with building societies directly fund mortgage lending to aspiring homeowners, meaning any cut to the Cash ISA limit could also reduce the lending power that supports first-time buyers and families across the UK. 

Sue Hayes, Chief Executive Officer at Nottingham Building Society, said: “The message to the Chancellor is simple: savers deserve choice. Cash ISAs are a trusted, straightforward way for people to save for the future - whether that’s a first home, retirement or an emergency fund. Restricting that choice risks doing real damage to financial confidence, at exactly the moment we should be encouraging people to save. 

“We have been helping people save for their future for 175 years, supporting them on their journey to home ownership. That purpose hasn’t changed and neither has our belief that choice and accessibility must be at the heart of savings policy. 

“Mutuals play a unique role in the UK’s financial system. ISAs held with building societies directly support lending to aspiring homeowners, and cutting the Cash ISA allowance would restrict that lending power, which runs counter to the Labour Party’s ambition to double the size of the mutual sector. 

“We strongly urge the Chancellor to protect choice, protect confidence and protect the Cash ISA.” 

Harriet Guevara, Chief Savings Officer at Nottingham Building Society, added: “We understand the Government’s ambition to promote a stronger investment culture, but cutting the Cash ISA allowance is the wrong lever to pull. Cash ISAs remain one of the few straightforward, low-risk tools that help people build financial security, particularly during uncertain times. 

“Our data shows that two thirds 66% of our digital and in branch fixed rate customers have used the full £20,000 allowance so far this year. These aren’t people with excess wealth - they’re individuals and families working hard to save for the future and making full use of the system as it was designed. 

“If the allowance is cut, one in three savers say they’d simply save less, and only 38% would consider switching to a Stocks & Shares ISA. That risks pushing people into products they don’t fully understand, or out of saving altogether. We believe in optionality and giving people the freedom to save or invest in a way that fits their goals and risk appetite.” 

“Ultimately, the ISA system should empower, not penalise. Stability, clarity and choice are what savers value most, and what will keep ISAs central to building financial resilience for years to come.”