Judging by the size of my mailbag, readers are pleased – delighted even – with last Wednesday’s news that our sacred tax-friendly cash Isas are not for the immediate chop as widely feared.
According to Treasury officials, the Chancellor of the Exchequer will now not be using her Spring Statement a week on Wednesday to announce a cutting of the annual £20,000 cash Isa allowance.
A reduction that many of us thought would result in it being hacked back to £4,000, with the emphasis in future on encouraging Isa users to invest rather than save.
Instead, we are told that Rachel Reeves will mull things over for a while before deciding the best way forward.
As the Treasury told the Financial Times: ‘We recognise the range of views around the current Isa system and want to ensure it strikes the right balance between cash and equities.’
It’s a victory for the Hands Off Our Cash Isas campaign which we launched with great vigour last month after getting wind of the fact that the Chancellor was contemplating major change – including the possibility of the tax-wrapper being removed from existing cash Isa balances.
The Building Societies Association, normally a bastion of conservatism, has also played a blinder, sending a strongly worded letter to Reeves warning her of the negative economic consequences of any cash Isa tinkering.
Pause for thought: According to Treasury officials, the Chancellor will now not be using her Spring Statement to announce a cutting of the annual £20,000 cash Isa allowance
Any diminution of cash Isas, it argued, could potentially lead to a mortgage shortage and a driving up of loan rates.
On Friday, Robin Fieth, the BSA boss, told me he was pleased the Chancellor would not be making changes to the Isa regime in the Spring Statement.
‘This not only provides welcome reassurance to savers,’ he said, ‘but also to everyone who might need a mortgage underpinned by these vital savings.’
He added: ‘We look forward to working with the Treasury as it develops its proposals over the coming months, and to making the case for cash Isas and the direct impact they have in supporting the UK economy.’
Pointedly, he finished by stating that the only people likely to benefit from reducing the cash Isa limit would be the ‘investment managers selling stocks and shares Isas’.
Of course, politicians should never be trusted, especially when the country’s public finances are in such a pickle.
There is every possibility that Reeves will let the furore die down – and then announce an assault.
Maybe as part of the Government’s Financial Services Growth & Competitiveness Strategy, due to report in the next month or so. Or maybe in the Autumn Budget.
For all the reassuring words of the past few days, cash Isas could yet go under the Chancellor’s knife. We’ll fight against any such move tooth and nail.
RAC’s £99 fee that just can’t be justified
Breakdown cover is a far more competitive market than it used to be, with the likes of GEM Motoring Assist, Green Flag and LV=Britannia Rescue all giving AA and RAC a run for their money.
Although AA and RAC remain iconic brands many motorists gravitate towards, their cover is pricier. And rivals know it.
For example, Green Flag, part of Direct Line Group which is in the throes of being taken over by Aviva, promises on its website: ‘We’ll cut your AA or RAC renewal by 50 per cent.
‘If we’re not half the price, tell us and we’ll pay you the difference.’ Bold and brassy.
There is another way to cut the cost of your AA and RAC breakdown cover – and that is to challenge the premium they offer at renewal.
It’s a tactic many readers have resorted to – and invariably they’ve saved themselves a bob or two.
Among them is Michael Brown, a 74-year-old retired IT worker for a brewing company, who lives in Diss, Norfolk, with wife Patricia, a 66-year-old retired primary school teacher.
This time last year, Michael was told his RAC breakdown cover would automatically renew at £143.99, the same price he
had paid the year before. This covers a Volkswagen Up the couple drive around town and a Peugeot motorhome they use for UK holidays.
Unhappy campers: Patricia and Michael saved on cover after querying an increase
‘We love our motorhome,’ says Michael. ‘I’ve driven it all the way up to – and along – Scotland’s north coast. Glorious.’
He adds: ‘It has always been reassuring to know we have cover if something goes wrong.’
This month, Michael was told his policy would automatically renew, but the premium would be £217.99 – a whopping 51
per cent rise. That comprised £118.99 for breakdown cover (compared to £44.99 in 2024) and a £99 ‘arrangement and administration fee’ which was also charged last year.
Michael wasn’t impressed and told RAC what he thought. Lo and behold, he was offered a revised premium of £108.99 for identical cover, lower than the £143.99 he had paid previously.
A few days ago, he received confirmation of the new premium. Although Michael is pleased with the final result, he wonders why RAC didn’t offer him the £108.99 premium to start with. The answer is that for every Michael, there are tens of RAC customers who don’t challenge their renewal price.
What annoys me is RAC’s £99 arrangement fee on a policy set up to auto-renew. I asked it to explain what work it did to justify this fee – and whether it applied to all breakdown policies.
Its response, quicker than it takes for one of its vans to arrive at a breakdown, said: ‘In line with other insurers, an admin fee forms one part of the cost of our breakdown policies. Our policy documents clearly show this fee.’ This didn’t answer my questions.
As appears the case with Michael (his 2025 policy documents have yet to be sent), this fee disappears when customers complain about inflation-busting price increases.
RAC, you’re taking the Michael.
Tell me your GOOD experiences with companies
More often than not, I use this column to criticise companies that have let down readers – whether a result of poor service, jacking up prices (as with the RAC and Michael Brown) or refusing to meet claims on insurance policies.
Today, the boot is on the other foot. I want to hear from you about the companies which you believe are BEST in game. Whether it’s because they pick up the phone promptly; deliver a superb high street service; or offer you value for money.
So, if there’s a company that you feel is genuinely on your side, drop me an email at jeff.prestridge@mailonsunday.co.uk and tell me why they stand out.
It’s time to highlight those businesses which help put the ‘great’ in Great Britain.
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