Anyone with a Cash ISA urged to take action before Thursday | Personal Finance | Finance

Financial experts are urging anyone with a Cash ISA to take action before the start of May as the best rates are highly likely to vanish.

Cash ISAs have been at the centre of controversial and mounting speculation that Chancellor Rachel Reeves is set to cut Cash ISA deposit limits from £20,000 to as low as £4,000 in the future – as money expert Martin Lewis confirmed that discussions on it have taken place in government.

Now, finance firms are pushing savers to take action before Thursday, May 1 because the best Cash ISA interest rates are set to fall if and when the Bank of England cuts rates next month as expected.

Antonia Medlicott, founder and managing director at financial education specialists Investing Insiders, points out that the current higher rates won’t last much longer, so money should be locked away sooner rather than later by transferring to a fixed Cash ISA, which is protected against base rate reductions.

She said: “With Cash ISAs currently offering up to nearly 5% in interest on deposits and some offering even more with introductory rates, savers can gain peace of mind over the returns they will receive and some great rates.”

She added: “However, most of the top-paying accounts offer ‘variable’ rates, meaning they can go up and down as the Bank of England rate fluctuates. You will generally get easier access to the cash held in these accounts.”

With a Bank of England rate cut expected in May, Antonia points out that savers should look at fixed rate accounts and long-term ISAs to secure a higher rate before it is too late.

She said: “Fixed rate savings accounts typically require you to lock your money away for a set period of time, but offer certainty over interest rates, no matter what the Bank of England does.

“If you have spare cash sitting in a low-interest account, moving it into an ISA protects it from tax on interest, dividends and capital gains.”

Finally, for anyone worried about potential changes to Cash ISAs, Antonia reveals that stocks and shares ISAs generally perform better.

She said: “Only 21% of the adult population use investment ISAs compared to 40% who use a cash ISA. Many people avoid investing because they simply don’t feel they have the knowledge and education to approach it.

“Investing is well suited to those who can put their funds away for at least five years, and if you can afford to look more long-term, investing offers greater potential gains. Historically, those who have put their faith in the markets have enjoyed far greater returns than those who used savings accounts instead.”