‘I love the Cash ISA – thrilled pensioners will get to keep full £20k’ | Personal Finance | Finance

Rachel Reeves’s Budget has hit working people where it hurts. The scale and stealth of her latest tax blitz has left many feeling betrayed after election promises not to hike taxes. The most costly and controversial move was to extend the freeze on income tax thresholds for another three years, all the way to 2031. That will make it even harder for people to manage rising living costs and build a secure future.

Jenny Keen suspected she would be in the firing line for the Budget, and now she says she was right. Jenny, 47, who works in financial services, said the Chancellor has targeted hard-working people like her. “We knew we’d be worst hit. We’ve always worked hard and we’ll be hit by everything Labour does.”

She was particularly annoyed by Reeves’s decision to scale back pension salary sacrifice, especially after taking a swipe at people in financial services who earn bonuses. Jenny took it personally. “I work in financial services and yes, I get a bonus because I work very hard for it. Since when did that become a bad thing?”

Jenny, who lives in Essex with her partner Ross, 48, said the Budget will do nothing to reverse Labour’s unpopularity. “Reeves is absolutely hitting everybody, especially those who work, save, invest and are active in the housing market. It’s all very counter-productive.”

She’s also unhappy with the decision to extend the income tax threshold freeze for another three years, lifting it to nine years in total. “Again, working people pay.”

Jenny, who doesn’t have children, questioned Reeves’s decision to axe the two-child benefit cap. “Some people decide not to have more children because they can’t afford it, while others can have as many as they like and claim benefits for them all. I’m not sure that’s fair.”

Paul Russell, 79, is thrilled that Rachel Reeves retained the full £20,000 Cash ISA allowance for the over-65s. He reckons the tax-free savings vehicle is “the greatest thing ever invented”, and any chancellor who messes with it does so at their peril.

Paul saves with Coventry Building Society, which he says offers terrific rates. “I try to use my entire £20,000 Cash ISA allowance each year and didn’t want to lose that opportunity. I love it. I’d rather tuck money away in my Cash ISA than spend it on a new car.”

Like many pensioners, Paul doesn’t want to take a chance by investing in a Stocks and Shares ISA. “I usually choose a Cash ISA that pays a fixed rate, so I know exactly what I’m getting for the year in advance.”

A retired NHS worker and lifelong Everton fan, Paul has just returned from a Caribbean cruise and is looking forward to the next one. “They’re all full of pensioners like me. There’s a grey army of us out there, and we’re the ones with the money. We love our Cash ISAs.”

Paul says he’s worked hard for decades and deserves the tax break. “I started age 12 in a greengrocer’s and didn’t stop until I was 66.”

He’s less impressed by the Chancellor’s decision to extend the income tax threshold freeze to 2031. “I’m sick of the personal allowance being stuck at £12,570. It’s not very much, is it? That won’t get you far.”

By contrast, Jordan Leith, 27, a public affairs manager from London, says the Budget was tough on younger workers like him.

Reeves’s decision to freeze income tax thresholds for another three years is a stealth tax that hits younger earners hardest. “As wages rise but thresholds stay fixed, more younger people will be dragged into higher tax bands earlier in their careers. This comes at a time when they’re already juggling housing costs, potentially starting a family, making student loan repayments and dealing with today’s high living costs.”

Jordan added: “It risks widening generational inequality and squeezing disposable income for those just starting out.”

He was also upset that Reeves cut the Cash ISA allowance to £12,500 for younger people. He says regularly using financial app Plum, and said it sends the wrong message to millions of everyday savers. “Cash ISAs are a cornerstone of financial planning, offering a safe, tax-free way to build security without stock market risk. Cutting them back discourages all that.”

Jordan says today’s Budget piles on the pain for the younger generation. “Following the 2008 financial crisis, Brexit, Covid and now an ever-growing cost-of-living crisis, it’s yet another financial hurdle.”