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A CASH ISA REFORM UNDER THE LABOUR PARTY GOVERNMENT COULD SEE A SHAKE-UP WITH SAVERS IMPACTED, WITH TWO ACCOUNTS MERGED. 07:47, 31 May 2025 Cash ISAs will be 'merged' with a
popular savings account, a personal finance expert has predicted. A cash ISA reform under the Labour Party government could see a shake-up with savers impacted, with two accounts merged. Ed
Monk, an associate director at Fidelity International, said: "That could mean a reduction in the allowances for cash ISA savings while maintaining the overall £20,000 ISA limit. Mr Monk
said Fidelity International had called for cash and stocks and Shares ISAs to be merged into one single ISA, thereby removing the barrier of having to move money between products or
providers when managing savings. READ MORE UK SET TO SIZZLE IN 'GLORIOUS' 27C MINI-HEATWAVE WITH 33 COUNTIES IN ENGLAND HIT Mr Monk said the government could expand the Personal
Savings Allowance - the sum that you can earn in interest each year before tax is due. "Currently, basic rate taxpayers can earn £1,000 of interest outside an ISA before tax is due.
Higher rate payers can earn £500 while Additional rate payers have no Personal Savings Allowance at all. He said: "Based on previous experience, changes to tax rules for savings have
not been made retrospectively - meaning new rules would apply only to money contributed after the rule-change is enacted. Money that is currently sheltered from tax is unlikely to be
suddenly exposed to it." "Additionally, the Government has made clear its desire to get the economy growing more quickly and has identified the UK’s role as a financial hub in
achieving that. It therefore makes some sense to encourage savers to put money held in cash to use in stocks or bonds, where it can potentially be more productive." he said. "This
could also increase domestic demand for shares, adding to the appeal of the UK to companies looking for a market on which to list their shares. Article continues below "Advocates of
limiting Cash ISAs have argued that no other country incentivises people to park their money in cash. Finally, there could be an attraction in removing tax-free status from cash interest as
a means to raise tax revenue. " He said: "Ending Cash ISAs would be very unpopular with those savers who currently enjoy the tax-free returns they offer. These might include people
who do not want to risk losses from investments, and perhaps those in retirement who do not have long time horizons, which can help reduce the risk of sudden investment losses."
"The government will also be wary of making any changes that adds to the tax advantages of the wealthy."