Savers urged to take action before 'its too late' as Rachel Reeves floats tax raid on ISAs

The building society's chief executive Andrew Craddock cautioned that "savers risk handing over more of their hard-earned interest if their savings aren't in the best accounts to suit their needs".

This warning comes amid speculation that the current ISA allowance could face cuts, prompting financial experts to encourage savers to maximise their tax-free savings whilst the opportunity remains available.

Research conducted by Darlington Building Society has revealed the extent of the savings crisis facing Britain's lowest earners.

The survey found that 63.7 per cent of households with incomes below £17,000 have no savings whatsoever.

This figure stands in sharp contrast to households earning between £10,000 and £149,999, where only 8.2 per cent report having no savings.

It is understood that the Treasury is exploring reducing the tax-free allowance attached to ISAs from £20,000 to as low as £4,000.

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Andrew Craddock, the chief executive of Darlington Building Society, outlined the benefits of ISAs as a tax-free savings vehicle.

He explained: "The message needs to be understood, if you've got money sitting in a savings account or a regular account and you're not using your ISA allowance, you could be losing out.

"Once the tax year ends, you can't carry it forward. It's unfortunately a case of use it or lose it, and we're most concerned about low-income families who will find saving difficult in the first place."

Craddock emphasised that with interest rates now more favourable, savers must understand their options and how to maximise returns.

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He stressed the importance of not waiting until March 2026 or until any announcement about potential changes to the allowance.

"For lower income savers, it's important to plan ahead to maximise the timeframe of the ISA allowance, as saving little and often throughout the year also helps to build up a savings buffer.

"When March 2026 or an announcement on the ISA allowance comes, it may be too late to make a significant deposit if disposable cash isn't available in a lump sum in the same way it could be for higher-income savers," Craddock explained.

The building society is encouraging savers to take action early in the tax year rather than delaying. "Top up regularly, shop around, and speak to someone if you're unsure," Andrew advised.