The looming crackdown on cash ISAs is set to rake in an extra £100m for Rachel Reeves’s Treasury in a fresh blow to savers, The i Paper can reveal.
Risk-averse savers who keep their money in cash, rather than moving it into a stocks and shares ISA, will end up paying tax on any interest earned, netting the Treasury tens of millions of pounds more than initially estimated.
It comes as a senior Labour MP warned ministers that their overhaul of the tax rules is “creating complexity and confusion”. At the same time, industry insiders are frustrated at a lack of detail on how the reforms will work.
Shorts – Quick stories
Scroll to previous short
Scroll to next short
Why have so many children’s toys been recalled for asbestos?
More than 30 children’s toys have been recalled from major UK retailers including M&S and Primark since the beginning of the year.
Caption:
Galt Nature Craft Kit
Image from https://www.gov.uk/product-safety-alerts-reports-recalls/product-recall-galt-nature-craft-kit-2604-0165
Photographer: Ciejek, Monika (Office for Produ
What you need to know
Dozens of children’s sand-based toys have now been recalled over fears they may be contaminated with asbestos.
Caption:
Active sand tub
Image taken from https://www.productsafety.gov.au/search-consumer-product-recalls/14-piece-active-sand-tub-sand-castle-building-set-sold-at-kmart-and-target-updated
Caption: girl playing with purple sand
Photographer: Kateryna Artsybasheva
Provider: Getty Images
Source: iStockphoto
In January, Hobbycraft withdrew its Giant Box of Craft kits after a customer alerted it to asbestos traces in the bottles of sand. The Office for Product Safety and Standards (OPSS) issued new guidance on the most reliable tests, which has led to an increase in contamination concerns.
Calls for further regulation
The OPSS needs to take action and ensure proper checks are being carried out to keep dangerous products off the shelves. It should also examine whether toys containing asbestos are being sold on online marketplaces
SUE DAVIES, HEAD OF CONSUMER PROTECTION POLICY AT WHICH?
Caption:
Galt Nature Craft Kit
Image from https://www.gov.uk/product-safety-alerts-reports-recalls/product-recall-galt-nature-craft-kit-2604-0165
Photographer: Ciejek, Monika (Office for Produ
Why is this so concerning?
- Dangerous exposure to asbestos fibres can cause cancer and a severe lung disease called asbestosis.
- The importation of asbestos has been banned in the UK for decades, since its serious health risks were flagged.
- Up until the 80s and 90s, it was widely used in insulation, car brakes and roofing.
- So far, contamination fears have each been raised individually through independent testing by manufacturers and retailers.
- Now, campaigners have called for a government-led testing effort to address the issue with sand-based kids’ toys.
strikes
Deal ‘within sight’ to end Birmingham bin strike
A cat rummaging through furniture and uncollected refuse bags in the Sparkhill area of Birmingham, amid an ongoing refuse workers’ strike in the city (Photo: Jacob King/PA Wire)
The council and union are close to striking a deal after a breakthrough in the bitter year-long dispute over jobs and pay.
Why are refuse workers on strike?
Members of the Unite union walked out in a dispute over pay in March 2025. They argued council plans to remove a role in its waste recycling and collection service would lead to pay cuts.
Caption: A cat rummages through furniture and uncollected refuse bags in the Sparkhill area of Birmingham, amid an ongoing refuse workers’ strike in the city. Nearly 400 council bin workers in Birmingham began indefinite strike action as part of a row over jobs and pay, with the Unite union saying the city council could end the dispute “by agreeing to pay a decent rate of pay”. Picture date: Monday March 17, 2025. PA Photo. Photo credit should read: Jacob King/PA Wire
Photographer: Jacob King
Provider: Jacob King/PA Wire
Source: PA
Copyright: PA
Refuse workers and supporters attend a mass picket and rally at a depot earlier this month (Photo: Guy Smallman/Getty Images)
Rubbish piled high on the streets of Birmingham, causing frustrated residents to complain of rodents, strong smells and other health hazards.
An end is in sight
Council leader John Cotton said he is hopeful the deal will be agreed.
“I want our workforce to be able to return to work and help us deliver the quality refuse and recycling services the people of this city deserve,” Cotton said.
Furniture and uncollected refuse bags in Yardley, east Birmingham (Photo: Jacob King/PA Wire)
NEWS
5 min read
World records
Chefs beat record for world’s longest tiramisu
(Photo: Muhammed Yaylali/Getty)
A 100 chefs toiled for two days in Chelsea to craft a layered dessert of sponge, cream, coffee and chocolate which was nearly as long as the Empire State Building stands tall.
Revenge is a dish better served cold
The Italian chefs used a whopping 50,000 sponge fingers and more than 3,000 eggs while assembling the pick-me-up dessert on site at Chelsea Town Hall.
(Photo: Muhammed Yaylali/Getty)
(Photo: Muhammed Yaylali/Getty)
The attempt was led by chef Mirko Ricci, who previously held the title before it was bested by a team from Italian dairy brand Galbani. He called his beloved tiramisu “the most incredible dessert that Italy has exported”.
The story in numbers
440.6m
The final dessert measured a staggering 440.6 metres long, just shy of the height of the Empire State Building, once the world’s tallest skyscraper.
61%
The previous record set by Galbani in Milan stood at 273.5m long.
Ricci’s new record blew this out of the water, as its connected sections measured 61 per cent longer than that of the bitter rivals who outdid him back in 2019.
Reeves announced at the last Budget that the maximum amount you can save into a cash ISA each year will fall from £20,000 to £12,000 from April 2027.
It will still be possible to put the full £20,000 into a stocks and shares ISA, or to split savings between the two accounts, the Treasury has promised.
The move is intended to encourage savers who are putting away relatively large sums to invest their money in the stock market and other financial instruments that are riskier than cash but tend to produce much better returns, giving them a larger retirement pot and boosting UK economic growth.
But the detailed rules that will determine which investments will be allowed have not yet been published, amid confusion over how to stop people diverting money above the £12,000 limit into “cash-like” investments intended to mimic the low but reliable returns offered by a savings account.
It has also emerged that the new regime will make a net of £100m for the Treasury over five years, because some savers are expected to keep their money in cash and take a tax hit on the interest, rather than moving it into a stocks and shares ISA. Estimates slipped out by the Treasury show a gain of £5m in the next financial year, rising each year to a maximum of £45m in 2030-31.
The full rules will be subject to public consultation, but finance industry insiders say the Government has been slow to produce detailed proposals. A source said: “The whole process has been weird. They clearly don’t understand retail investing.”
Dame Meg Hillier, the Labour MP who chairs the influential Treasury Committee in the House of Commons, told The i Paper: “When the Government’s planned ISA reforms were announced, it wasn’t clear how these changes could be applied in the real world. It’s deeply concerning that almost six months later, there is still no clarity.
“I have been pressing the Treasury on what they mean by the ‘cash-like’ holdings which will be banned from stocks and shares ISAs, but no answers have been forthcoming.
“I support the Government’s ambition to get people investing their money for better returns over the long term. The best way to put people off investing, however, is by creating complexity and confusion in the system. Unfortunately, that is the situation we are in. If the Treasury is going to make these changes and ensure they are well understood by industry and consumers before next April, they need to start making progress. If they don’t, they risk putting people off investing their savings.”
Sir Mel Stride, the shadow Chancellor, said: “Rachel Reeves is punishing hardworking people for doing the right thing: saving for a home, for their family, or for a secure retirement. The ISA system works well – helping millions of people save and invest for their future without fear of unfair taxation.
“Labour’s plan to slash the ISA allowance is nothing short of a savings tax. It would hit ordinary people, undermine confidence, and send a terrible message: that under Labour, saving responsibly will be penalised.”
A Government spokesman said: “Overall, the savings package at the Budget does not raise revenue – and the vast majority of savers will continue to pay no tax on their savings.
“These reforms are about getting more people investing for better long‑term returns. The Treasury and HMRC are working at pace with industry on the detailed rules, including anti‑circumvention, and will update on next steps in due course.”
