Skipton CEO Criticizes Cash ISA Changes as Adding Market Complexity
Stuart Haire, chief executive of Skipton Group, has declared that the government's decision to lower the cash ISA tax-free ceiling has introduced "complexity" into the market. This comes as British savers continue to prioritize maintaining cash safety nets for their financial security.
Government Policy and Market Response
In an exclusive interview, Haire acknowledged that while the government's ambition to encourage more Britons to invest is commendable, reducing the cash ISA limit to £12,000 starting April 2027 is not the optimal approach. The government has intensified efforts to boost retail investing and stimulate economic growth, but Haire emphasized that there are superior methods to achieve these objectives without complicating a product that currently functions effectively.
"We believe the accommodation that has been reached has added complexity to the cash ISA market, though it could have been significantly worse," Haire stated. "We support the government's goal of promoting investment, but making a reliable product more complicated is not the best strategy."
The Enduring Value of Cash Savings
Haire highlighted that cash savings remain crucial for specific financial goals, such as accumulating housing deposits. Despite arguments against holding cash, he stressed that many individuals require rapid access to their funds, making cash an essential component of society alongside investment vehicles.
According to Bank of England data, cash ISAs persist as the UK's most popular savings product, with a record £37 billion deposited in accounts during 2025. Skipton's own savings book surpassed £30 billion for the first time in its latest annual results, marking a 7.8 percent increase from 2024 and returning £195.7 million to members.
Industry Dispute and Broader Implications
The cash ISA reduction has sparked ongoing debate between brokers and building societies. Brokers contend that the Chancellor should have eliminated the product entirely, while building societies, which hold approximately 46 percent of cash ISA balances totaling £205 billion as of late 2025, defend its importance.
Providers argue that cash ISAs help fund mortgages, and reducing inflows could potentially increase home loan costs—a claim brokers dismiss as "scaremongering." The Treasury maintains that the cut will incentivize savers to invest in stocks and shares ISAs, fostering long-term wealth accumulation.
Housing Market Dynamics and Lifetime ISA Concerns
The UK housing market faced challenges in 2025, described by Skipton as "stop-start" due to buyer uncertainty over tax and regulatory changes alongside regional price increases. Nevertheless, Skipton's mortgage book exceeded £33 billion last year, and its estate agent division, Connells, reported pre-tax profits of £73.1 million, up from £61.3 million.
Connells generated £33.3 billion in lending for UK mortgage providers, with half of new mortgage lending directed to first-time buyers. Industry observers note market improvement this year, fueled by lower interest rates that have restored buyer confidence.
Haire pointed out that falling interest rates, expected to decline further after UK inflation dropped to three percent in February, are particularly supportive for mortgage growth and housing transactions. However, he urged the government to provide greater consistency for the market, noting that while regulatory changes show promise, more can be done to streamline the home buying process for all parties.
He also called for reforms to the Lifetime ISA, which he says inadequately supports the London market due to its £450,000 tax-free cap. With average London property prices exceeding this limit, the product disadvantages buyers in the capital despite being beneficial in other regions.
Financial Performance and Strategic Investments
Despite growth in savings and mortgage portfolios, Skipton Group's pre-tax profit decreased to £275.2 million from £318.6 million the previous year. The group attributed this dip to restructuring costs and investments in its international business, which offset gains in its building society and estate agent operations.
Skipton continues to invest in exclusive savings products and member benefits, reinforcing its commitment to long-term value for customers amid evolving market conditions.
