Chancellor Rachel Reeves has confirmed that the annual tax-free ISA allowance won’t be reduced from £20,000.

Ms Reeves stated that she ‘absolutely wants to preserve’ the £20,000 tax-free investment people can make every year.

The Chancellor is set to launch a consultation into how the UK ISA market could be overhauled, and did not rule out changes to cash ISAs.

The overall annual savings limit remains at £20,000 for 2024/25 and 2025/26. Investors are allowed to invest in a cash ISA, an investment ISA, an Innovative Finance ISA or a combination of the three, subject to not exceeding the overall annual investment limit.

Investors are able to transfer their investments from a stocks and shares ISA to a cash ISA (or vice versa).