Published: 31 July 2025
A number of reforms were mentioned, but one area that many of our members may have been keeping a close eye on is whether there would be any changes to annual contribution limits for cash ISAs.
No immediate change to ISA allowances
In her speech, the Chancellor reiterated the Government’s commitment to encouraging an investment culture across the UK. Despite media speculation, no immediate changes have been made to the annual ISA allowance. This means the current limit of £20,000 per tax year remains in place for the foreseeable future.
This means that for this tax year, you can continue to save up to £20,000 across your ISA accounts. The allowance can be split across different types of ISAs.
At Leeds Building Society, we’ve been vocal about the value of Cash ISAs. We know that they provide certainty for people in retirement, those buying their first home, or those saving for other major life events. We’re pleased the Chancellor has listened to the concerns we’ve raised and confirmed that the Government won’t press ahead with changes for now.
Loan-to-income review for mortgage lending
The Chancellor also addressed the loan-to-income cap, which currently limits how many mortgages we can offer where a member is borrowing more than 4.5 times their income.
As part of wider efforts to improve access to home ownership, the Bank of England’s Financial Policy Committee has made an assessment to allow a modest change to the limit that will allow lenders to support more first time buyers to get a foot on the ladder. This is a crucial development in the current economic environment, given that house prices in many areas of the UK have risen at a much faster rate than incomes over recent years.
The PRA and FCA are changing their rules in accordance with this, and we’ve decided to apply to the PRA to modify our own criteria. This will enable us to responsibly support more creditworthy borrowers who, under previous rules, may have faced barriers to borrowing enough to purchase their own home. In doing so, we’ll help put home ownership within reach of more people.
Looking ahead
While there are no changes to cash ISA contribution limits right now, the Chancellor confirmed that the Government will keep its approach under review, to better encourage savers to invest in stocks and shares.
We’ll continue to monitor developments closely and continue to campaign against any changes to contribution limits on behalf of our members. As always, we’ll keep you informed of any updates that may affect you or your savings options. If you haven’t yet used your full ISA allowance for this tax year, cash ISAs remain a tax-efficient way to save.
