The cut to the cash ISA allowance for under 65s, announced in the Budget, may push more savers towards investments and offers advisers a timely opportunity to reassess how clients balance security and long-term growth.
From April 2027, under 65s will only be able to put £12,000 into a cash ISA within the £20,000 overall allowance.
According to Fidelity International, that shift could encourage savers to look beyond cash and consider investment-based tax wrappers.
Cash versus investing since 2017
Fidelity’s analysis tracks returns since April 2017, when the ISA allowance was first increased to £20,000. Over that period:
| ISA Strategy | Value Today (Oct 2025) |
|---|---|
| £20k held in cash ISA | £23,549 |
| £20k in global equities | ~£50,700 |
| Inflation-adjusted value needed | £27,000 |
Prices have risen by more than a third in that time. While cash savers have fallen behind inflation, equity investors have more than doubled their original investment.
Jemma Slingo, pensions and investment specialist at Fidelity International, said:
“Cash will always have a role in short-term security and peace of mind. But when it comes to growing wealth over time, investing can provide a much better buffer against inflation.”
Blended approach could appeal to cautious savers
A saver who split the 2017 ISA allowance, placing £12,000 in cash and £8,000 in global equities, would now have around £34,400. That is well ahead of cash-only returns, with less volatility than a fully equity-based strategy.
Regular investing shows meaningful compounding benefits
For those making full annual ISA contributions since 2017, the difference in outcomes is significant:
| Strategy | Value Today (Oct 2025) |
|---|---|
| Cash ISA only | ~£205,000 |
| 100 percent in global equities | ~£335,000 |
| 50/50 blended | ~£269,000 |
Slingo added: “The ISA allowance change is a reminder to check whether clients’ portfolios are working as hard as they could. Even modest exposure to equities has historically delivered much stronger long-term outcomes than cash.”
Planning implications for advisers
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The reduced cash allowance may push cautious savers toward blended ISA strategies
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Advisers may need to help clients understand inflation risk versus market volatility
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ISA tax wrappers, diversification and drip feeding contributions become increasingly important
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