23 June 2026
If you are covering the government's announcement around ISA reform, please see the following comment from Rachael Griffin, tax and financial planning expert at Quilter:
The Treasury paper published today indicates how the government intends to reshape the ISA market. However, significant gaps remain in how these policies will be implemented, and the detail will be critical.
The ambition to encourage more people to invest is right, but the proposals also show why the ISA system works best when it is simple, trusted and easy to understand. A 22% charge on cash interest inside Stocks and Shares ISAs, new rules for money market funds and restrictions on transfers all risk making the product feel more complicated at precisely the point policymakers want cautious savers to take their first steps into investing. In practice, applying a flat-rate charge to interest within the product means investors will simply receive a reduced net return regardless of their personal tax position, effectively introducing a consistent haircut across cash holdings rather than targeting a specific behaviour.
It is welcome that the government appears to have stepped back from a broader restriction on money market funds and instead focused on portfolios invested 100% in these assets. That is a more proportionate approach and recognises that money market funds can play a legitimate role in investment portfolios. The remaining danger is that rules designed to stop a narrow form of cash reconstruction still end up creating a wider confidence problem. Most people are not trying to game the system. They are trying to make sensible decisions with their money, often gradually and with limited confidence. It will be up to industry to support and educate consumers how to adopt these changes and build confidence in investment products. Cash and money market funds can play a legitimate role in that journey, whether as a temporary holding position, a way to manage volatility, a liquidity buffer within a managed portfolio, or part of a controlled move into longer‑term assets.
That is why simplicity should be the guiding principle. Consumers need to know what an ISA is, what it does and what tax treatment they can expect. Advisers and platforms need rules that can be explained clearly, administered consistently and applied without distorting sensible portfolio construction.
The better route is proportionate anti‑avoidance, clear marketing rules and targeted support that nudges persistent cash holders towards diversified investing over time. That would address the behaviour the Treasury is concerned about without turning one of the UK’s most successful savings products into a technical maze. ISA reform should make the journey from saving to investing easier to understand, not harder to start.
