What the latest UK Budget means for savers

The UK Government’s latest Budget has brought significant changes to the Cash ISA regime—changes that will impact savers across the country, including many of our members here in Wales. As proud members of the Building Societies Association (BSA), we want to share the BSA’s perspective on these developments and what they mean for people looking to build their financial resilience.

While the outcome is not what we, as a sector, had hoped for, it is important to acknowledge the progress made through sustained campaigning by the BSA over recent months. Earlier this year, the expectation was that the Cash ISA subscription limit could have been reduced to as low as £4,000. Thanks to the BSA’s lobbying efforts with HM Treasury—and ongoing engagement with policymakers—the final limit has been set at three times that level, alongside a number of important concessions that benefit savers.

Protecting options for savers aged 65 and over

One of the most positive outcomes from the lobbying is the carve-out introduced for savers aged 65 and over. This group, who may be drawing down pensions or shifting their investments to safer assets, could have been disproportionately affected by a drastic reduction in ISA allowances. The new protection ensures their ability to continue saving tax-efficiently remains supported.

Implementation delay to 2027

We also welcome the decision to delay implementation until April 2027. The BSA successfully argued against a rapid rollout of the new rules, which would have created confusion for both savers and providers. This additional time will help us—and the wider sector—prepare effectively and minimise the impact on members, particularly around ISA transfers.

Concerns about an additional 2% tax on savings interest

Alongside the ISA changes, the Budget introduced an additional 2% tax on savings interest—a measure the Treasury did not consult the BSA on in advance. Here at Swansea Building Society, we share the BSA’s concerns about the effect this will have on people who save responsibly.

This additional tax risks penalising those who are trying to build financial resilience, and it sends a discouraging signal at a time when encouraging a strong savings culture should be a national priority. Combined with the reduced Cash ISA limit, it may make it harder for people to set money aside for the future.

A message from the former BSA Chief Executive

Robin Fieth, former Chief Executive of the BSA, summarised the sector’s view:

“We recognise that the Chancellor has taken time to consider changes to the ISA regime, and are relieved that the reduction to Cash ISAs is less severe than the speculation at the beginning of the year. We are however disappointed that the Cash ISA subscription limit has been lowered. It could also add more complexity, particularly around ISA transfers, and risks damaging the overall ISA brand.”

He welcomed the protections for older savers and the delayed implementation but warned that:

“The additional 2% tax on savings interest penalises people who responsibly put money aside. Coupled with the cut to the Cash ISA limit, it disincentivises a savings culture and sends the wrong message.”

At Swansea Building Society, we fully agree that the focus should be on helping people understand their savings and investment choices — not on reducing options or penalising savers who do the right thing.

What happens next?

The BSA will now focus on influencing the implementation of these policy changes, as well as contributing to the consultation on the future of the Lifetime ISA. Key priorities include:

• Protecting the ability to transfer freely between ISA types
• Ensuring sufficient flexibility for first-time buyers saving for a deposit
• Reducing complexity for consumers and providers alike

Here at Swansea Building Society, we will continue to monitor developments closely and keep our members informed. Our commitment remains the same as always: to help people across South Wales save safely, confidently, and in a way that supports their long-term financial wellbeing.

If you would like to discuss how these changes may affect your savings plans, our friendly branch staff are always here to help. With branches in Swansea, Mumbles, Carmarthen and Cowbridge, we would love to hear from you face to face or by telephone.