Savings and Pensions
Individual Savings Accounts (ISA)
The investment limits for ISAs have not changed since 2017/18: they are £20,000 for a standard adult ISA (within which £4,000 may be in a Lifetime ISA), and £9,000 for a Junior ISA or Child Trust Fund. According to the 2025 Budget, these will remain fixed until 5 April 2031.
Last year it was announced that there would be a restriction on the amount that people under 65 could invest in a cash ISA, to take effect in April 2027. Chancellor Healey has cancelled this change, so it will still be permissible to invest £20,000 in a cash ISA or a stocks and shares ISA or a combination of the two.
A Lifetime ISA has allowed people under 50 to save up to £4,000 a year towards the purchase of a first home. The government added 25% to the amount paid in by the saver, but this would be clawed back by a 25% exit charge if the individual withdrew the money from the ISA (except in certain circumstances). With effect from 29 October 2026, this charge is reduced to 20% if the circumstance is the purchase of a house above the maximum £450,000 value for houses under the scheme. The charge remains 25% on other non-qualifying withdrawals.
The Chancellor announced that a new First-Time Buyer ISA will be introduced from April 2029 to replace the Lifetime ISA. It will again offer a 25% bonus to assist with the purchase of a house costing up to £450,000, but the bonus will be paid when the account is used for a qualifying purpose. It will therefore not require a clawback charge, but the bonus will also not earn interest in the meantime.
Pension contributions (Table C)
The Chancellor has made no changes to the reliefs available for contributions to pension schemes or withdrawals from them.
The maximum amount that can be withdrawn as a tax-free lump sum remains £268,275 unless the person is entitled to ‘protection’ in relation to the original introduction of the Lifetime Allowance or any of the subsequent reductions of the limit.
There has also been no change to the forthcoming restriction on ‘salary sacrifice’ arrangements. From April 2029, any amount within such an arrangement in excess of £2,000 will be subject to employer and employee NICs as if cash salary has been paid (although the whole contribution will still be free of income tax).