27 Oct, 2026
UK savers fear forthcoming Cash ISA changes could make it harder to achieve their long-term savings and retirement goals, new research from challenger bank Hampshire Trust Bank (HTB) has revealed.
The Government’s new savings approach was announced in the Autumn Budget last year in a bid to encourage cash savers to become investors.
The Cash ISA allowance is reducing from £20,000 to £12,000 from April 2027 for under 65s. However, the overall tax-free ISA limit will remain at £20,000, with the Government hoping savers will be encouraged to open Stocks and Shares ISAs to access the remaining tax-free allowance, but those of working age say these reforms have made them feel “penalised”.
A recent report carried out among savers with challenger bank Hampshire Trust Bank (HTB) has revealed data from real ISA savers that shows the true reaction to the shake-up.
More than half (52%) of working-age savers expect the proposed Cash ISA changes to affect their retirement plans.
The majority (76%) of ISA saver respondents under 65, who would be directly affected by the allowance reduction, say they believe achieving their savings goals will become harder after April and 70% are uncomfortable moving their cash into stocks and shares investments.
The findings come ahead of the Autumn Budget, with retirement planning and the future of the State Pension Triple Lock firmly in the spotlight.
Ian Jackson, Managing Director of Savings at HTB, said:
“The vast majority (89%) of affected savers are concerned about next year’s Cash ISA changes, while seven in ten are uncomfortable moving their hard-earned savings from cash savings into Stocks & Shares investments.
“More than a quarter (27%) of working age savers told us they would choose a standard taxable savings account over a tax-free Stocks and Shares ISA. They would rather pay tax on their savings than put it at risk by investing it.
“People want financial security in retirement, and our findings underline how strongly many value the certainty of cash in their financial planning. Investing is uncharted territory for most, and people don’t want to be pushed into taking investment risks they are not comfortable with.
“Our customers have made their position clear: many are unlikely to turn to investments, so the changes may not deliver the behavioural shift the Government intends. Instead, savers feel they are being ‘penalised’ for saving responsibly and are concerned about the impact on their retirement plans.”
Savers’ concerns were also reflected in their comments, with many expressing frustration that responsible saving could leave them worse off. One wrote: “I am looking to be self-sufficient in my retirement. I feel I am being penalised for living within my means and trying to save for my future income”, while another said: “Those people sacrificing and saving for future life events and goals should not be penalised by the tax system.”
With the new tax year fast approaching, HTB is suggesting that savers under 65 may wish to consider using more of this year’s tax-free allowance while it is still available.
A total of 2,283 ISA savers took part in the research, with over 40% of those under 65 saying their Cash ISA is their primary tool for retirement planning.
Further findings among that age group revealed:
- 89% are concerned about the proposed Cash ISA changes
- 27% would put savings above £12,000 into a standard ‘taxable’ savings account
- 19% would consider Stocks & Shares ISAs
- 52% expect their retirement plans to be affected
- 70% are uncomfortable moving their cash into Stocks & Shares investments.
HTB is an award-winning specialist UK bank offering a range of savings accounts for personal, business and charity customers, alongside lending solutions for UK businesses.
The bank’s savings range includes Cash ISAs, easy access, notice and fixed rate accounts.
For further information about HTB’s savings accounts,
click here.
