Reeves to delay cash Isa reform after backlash
The Chancellor had been expected to use her Mansion House speech on July 15 to announce a reduction in the amount of money that savers could put into the product.
However, she has now rowed back on the plans in favour of encouraging households to put more of their savings into stocks and shares.
While the reforms have not been dropped altogether, Whitehall officials are split on how to progress reforms that could see the amount savers can put into a cash Isa tax-free fall from £20,000 to as low as £5,000.
Ms Reeves is looking to consult with the industry more broadly about the changes as she responds to a wave of recent opposition from building societies and consumer champions.
The likes of Yorkshire, Coventry and Skipton building societies all opposed the reforms, which they said could restrict their ability to raise the funds needed to provide loans to homeowners.
Nearly a third of people in Britain have a cash Isa, with around £300bn in savings used by building societies to lend to homeowners. The UK has 42 building societies, serving 26m customers.
Chris Irwin, Yorkshire Building Society's head of savings, said earlier this week that 'reducing Isa deposits could make mortgages more expensive and less available'.
Mr Irwin said: 'Cash Isas make up 39pc of all building societies' retail savings balances. This provides a vital source of funding to allow us to offer more mortgages to those that need them.'
That view was echoed by Jeremy Cox, head of strategy at Coventry Building Society, who added that Ms Reeves's plans could have a wider impact on Labour's ambition to build 1.5m homes by the end of Parliament.
He said: 'We want to support the Government's ambition to build 1.5m new homes. Cutting Isa limits could make that more difficult and have a significant impact on economic activity.'
However, City stockbrokers supported the plans as their investment platforms would have been bolstered by more money being pumped into stocks and shares Isas.
A Treasury spokesman said: 'Our ambition is to ensure people's hard-earned savings are delivering the best returns and driving more investment into the UK economy.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
29 minutes ago
- The Independent
Government must stop children using VPNs to dodge age checks on porn sites, commissioner demands
England's children's commissioner has demanded that the government stop children from using virtual private networks (VPNs) to get around age verification on porn sites. Calling for change, Dame Rachel de Souza warned it is "absolutely a loophole that needs closing" as she released a new report, which found the proportion of children saying they have seen pornography online has risen in the past two years, with most likely to have stumbled upon it accidentally. VPNs are tools that connect internet users to websites via remote servers, enabling them to hide their real IP address and location, which includes allowing them to look as if they are online but in another country. This means the Online Safety Act, which now forces platforms to check users' ages if attempting to access some adult content, can be dodged. After sites such as PornHub, Reddit and X introduced age verifcation requirements last month, VPNs became the most downloaded apps, according to the BBC. A government spokesperson told the broadcaster that there are no plans to ban VPNs as they are legal tools for adults. Dame Rachel told Newsnight: "Of course, we need age verification on VPNs – it's absolutely a loophole that needs closing and that's one of my major recommendations." She called on ministers to look at requiring VPNs 'to implement highly effective age assurances to stop underage users from accessing pornography'. More than half (58 per cent) of respondents to the commissioner's survey said that, as children, they had seen pornography involving strangulation, while 44 per cent reported seeing a depiction of rape – specifically someone who was asleep. Made up of responses from 1,020 people aged between 16 and 21 years old, the report also found that while children were on average aged 13 when they first saw pornography, more than a quarter (27 per cent) said they were 11, and some reported being aged 'six or younger'. The research suggested four in 10 respondents felt girls can be 'persuaded' to have sex even if they say no at first, and that young people who had watched pornography were more likely to think this way. The report, a follow-on from research by the Children's Commissioner's office in 2023, found a higher proportion (70 per cent) of people saying they had seen online pornography before turning 18, up from 64 per cent of respondents two years ago. Boys (73 per cent) were more likely than girls (65 per cent) to report seeing online pornography. A majority (59 per cent) of children and young people said they had seen pornography online by accident – a rise from 38 per cent in 2023. Dame Rachel said her research is evidence that harmful content is being presented to children through dangerous algorithms, rather than them seeking it out. She described the content young people are seeing as 'violent, extreme and degrading' and often illegal, and said her office's findings must be seen as a 'snapshot of what rock bottom looks like'. Dame Rachel said: 'This report must act as a line in the sand. The findings set out the extent to which the technology industry will need to change for their platforms to ever keep children safe. 'Take, for example, the vast number of children seeing pornography by accident. This tells us how much of the problem is about the design of platforms, algorithms and recommendation systems that put harmful content in front of children who never sought it out.' The research was done in May, ahead of new online safety measures coming into effect last month, including age checks to prevent children accessing pornography and other harmful content. A Department of Science, Innovation and Technology spokesperson told the BBC that "children have been left to grow up in a lawless online world for too long" and "the Online Safety Act is changing that'. However, responding to Dame Rachel's remarks on VPNs, they added that there are no plans to ban them, "but if platforms deliberately push workarounds like VPNs to children, they face tough enforcement and heavy fines'.
The Independent
29 minutes ago
- The Independent
Applied Nutrition beats guidance amid strong sales momentum
Applied Nutrition has revealed stronger-than-expected sales for the past year and said it is on track to surpass estimates for next year after strong recent demand. Shares in the sports nutrition and health business shot higher in early trading on Tuesday as a result, taking them to their highest level for six months. The Coleen Rooney-backed firm's sales jumped by 24% to around £107 million for the year to July 31, compared with the previous year. It had previously guided towards revenues of around £100 million. Analysts at Panmure Liberum said the performance was driven by 'new listings, more shelf space and increased distribution in partners across the world'. The Liverpool-based business' adjusted earnings are set to have risen by around 19% for the year as a result. It also told investors that recent positive sales momentum means it expects to beat current revenue expectations for the new financial year, of around £112.4 million. The company said: 'The board remains confident that the group's core strengths, including its B2B-focused business model, breadth of high-quality products and industry leading new product development, will continue to drive sustained revenue growth and strong profitability over the long-term.' It also reported that its net cash level is running ahead of expectations. Thomas Ryder, chief executive of Applied Nutrition, said: 'We are proud to report that we have exceeded the guidance we gave at our IPO, with our first full-year results expected to come in ahead of market expectations. 'Our focus and ambition remain as strong as ever – in delivering for our shareholders, customers and team – and we are excited about the opportunities we have in the pipeline for the year ahead.' Shares in the company rose by 7.5% on Tuesday morning.
The Guardian
30 minutes ago
- The Guardian
Lidl close to overtaking Morrisons as UK's fifth-biggest supermarket
Lidl is close to overtaking Morrisons to become the UK's fifth biggest supermarket chain after a sales rise as shoppers attempted to offset higher household bills with cheap groceries. The German-owned discounter increased sales by 10.7% in the three months to 11 August, according to the latest market share data from analysts at Worldpanel, formerly known as Kantar. This was more than double the pace of the wider market, which rose 4.5%. That put Lidl's share of the grocery market at 8.3%, 0.1 percentage points off Morrisons' share of 8.4%, as the Bradford-based chain continued to struggle with sales up just 0.9%. Morrisons is trying to turn around performance after building up debts in a £7bn takeover by the US private equity group Clayton, Dubilier & Rice in 2021. Tesco, the UK's biggest supermarket chain , notched up sales growth of 7.4%, taking its market share to 28.4%, well ahead of any rival. Its closest competitor, Sainsbury's, increased sales by 5.2%, taking its market share to 15%. The UK's number three chain, Asda, also continues to have difficulties. Its sales were down 2.6% despite efforts to turn around performance after the return of its former boss, Allan Leighton, as chair. Asda is in danger of being overtaken by discounter Aldi, which is just one percentage point behind it with a market share of 10.8%. Aldi's sales grew 4.8% in the past three months. Aldi and Lidl continue to rapidly open stores, putting them on track to enter the top tier of British supermarkets and disrupt the traditional 'big four'. Asda and Morrisons' growth is behind the 5% level of grocery inflation registered in August by Worldpanel, suggesting the amount of items they sold has dropped. Worldpanel said inflation had eased 0.2 percentage points in August from the 5.2% rate registered in July as prices of dog food, sweets and sparkling wine, including champagne, fell back. Fraser McKevitt, the head of retail and consumer insight at Worldpanel, said: 'We've seen a marginal drop in grocery price inflation this month, but we're still well past the point at which price rises really start to bite and consumers are continuing to adapt their behaviour to make ends meet. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion 'What people pay for their supermarket shopping often impacts their spending across other parts of the high street too, including their eating and drinking habits out of the home.' He said casual dining and fast food restaurants had recorded a particular decline in visitors over the summer, and such trips had fallen by 6% during the three months to mid-July 2025 compared with last year. However, coffee shops bucked the trend as their sales continued to rise. While cutting back on dining out, households appeared more prepared to treat themselves at home. Sales of branded goods were up 6.1%, growing faster than own-label alternatives, which rose 4.1%, a turnaround from earlier in the year. Premium own-label goods, such as Sainsbury's Taste the Difference or Tesco's Finest ranges, were also up strongly – by 11.5%. While still relatively high, the potential peak in inflation could be good news for the chancellor, Rachel Reeves, as she weighs spending cuts or tax rises in her autumn budget.
