BUDGET 2025: What does it mean for savers?
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If you’re a saver, you could be either a winner or a loser in this budget, depending on how you choose to save, and what your income is.
Low-income earners who are eligible to use the Help to Save scheme could be about to benefit from its extension into a permanent scheme from 2028. Help to Save lets those on low incomes put away up to £2,400 (£50 a month) over four years, which is then boosted by a Government bonus of 50% on the highest amount you had in the account. No other type of savings account even comes close to offering that level of top-up. So the fact the scheme is going to be extended is great news if you are UK resident and in receipt of either Working Tax Credit, Child Tax Credit (CTC), or Universal Credit if you (or your partner if it is a joint claim) had take-home pay of £1 or more in your last monthly assessment period.
For wealthier savers, who regularly use their full £20,000 annual allowance to grow money without paying any tax on the interest they receive, there’s less good news. Not only will the Cash ISA limit be cut from £20,000 per year to £12,000 from April 2027, but any savings you hold outside of an ISA could now be subject to a higher rate of tax too as there’s going to be a 2% rise in the tax on savings and dividends income.
There’s an exception to the Cash ISA rule however – if you’re over 65, you can keep your full £20,000 per year allowance, meaning it’s no change for you.
If you’re worried about what to do once these changes come into effect, we’ve written about the options savers still have, here.
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