The best Isas you can still open NOW to shelter savings and investments from Budget tax raid

Products featured in this article are independently selected by This is Money’s specialist journalists. If you open an account using links which have an asterisk, This is Money will earn an affiliate commission. We do not allow this to affect our editorial independence. 

Britons are braced for a Budget in which the Chancellor is widely expected to announce sweeping tax rises. 

While nothing is confirmed yet, this could include tinkering with the Isa allowance so that less of people’s savings – or returns in the case of stocks and shares Isas – is protected from tax. 

Rachel Reeves may also decide to hit investors with higher capital gains tax when they sell shares. 

As a result, people have been piling money into tax-free Isas in the days and weeks leading up to the Budget – and there is still time to do so. 

It’s not advised to make any rash decisions based on speculation, and finance experts are urging people not to panic. 

It is also possible that any changes to Isa rules would not be in place straight away, and would instead come in at the start of the new tax year in April 2025.  

But for those who decide sheltering money or investments in an Isa is right for them, we explain the potential changes – and highlight some of the accounts on offer that can still be opened before the Budget. 

Why are savers putting more money into Isas? 

Isas are the bedrock on which diligent savers and investors can build up a nest egg up to £20,000 each year, without having to worry about paying tax.

But it has been reported than the annual Isa allowance could be cut from £20,000 to £15,000 in the Budget, meaning less of your money would fall within the tax-free wrapper every year.

As a result, savers have been piling money into Isas now, to take advantage of the higher limit in case it is cut later on.   

Stockbroker Hargreaves Lansdown has reported record number of top-ups for Isas. The number of people maxing out their Isas with the firm, which offers cash Isas as well as stocks and shares, so far this tax year is up 40 per cent.

New figures from the Bank of England also reveal savers poured £3.9billion into Isas in September.  

But there is also a word of warning for those with a large amount of money already held in an Isa. 

It has been suggested that Labour could introduce a £500,000 lifetime Isa allowance in the Budget. Most savers won’t get close to that amount, but if you think you might then stashing more in the tax-free wrapper now could potentially backfire. 

If you want to open an Isa to keep as much of your money tax free as possible, there is still time before the Budget – here are five of the best cash Isas you can still open.

Easy-access Isas

Trading 212 

Trading 212’s Isa* offers the best overall rate for an easy-access cash Isa paying 5.1 per cent. 

There are no limits to how many times you can withdraw your money and Trading 212 will not reduce your interest rate for accessing your money.

Trading 212’s Isa is a flexible Isa which is a big benefit to savers with the financial firepower to max out their Isa limit each year. 

Flexible Isas allow you to dip into your pot and, as long as you put the money back in during the same tax year, it doesn’t lose its tax-free wrapper or use up any of that year’s Isa allowance. 

The account can only be opened by downloading Trading 212’s app and you can start saving from as little as £1.  

Chip

Chip’s flexible Isa*, paying 4.84 per cent offers the best rate for customers who want to dip in and out of their pot without using up their Isa alowance in the process. 

There are no limits as to how many times you can withdraw your money, and Chip will not reduce your interest rate for accessing your money.

It worth noting that when the base rate moves up or down, your savings rate will move on the same day with this account.

It tracks at 0.26 per cent below the current base rate, which stands at 5 per cent. Previously this account paid 5.1 per cent, when the base rate was at 5.25 per cent. 

When the base rate moves up or down, your savings rate will move on the same day.

A Chip spokesman said: You can open a Chip cash Isa in a few minutes – all you need is our app and your national insurance number – so you could do it right up to the Budget. 

‘I’d say with a degree of certainty that any changes to Isa rules would come with a healthy delay to allow financial institutions to adapt their processes.’

Paragon Bank

Paragon’s easy-access Isa, paying 4.87 per cent, is also a flexible Isa, meaning savers wont lose their Isa allowance if they want to withdraw money from their pot. 

Termed ‘double access’, Paragon’s Isa only lets you withdraw money twice before being penalised. On a third withdrawal, the rate drops to just 1.5 per cent. 

The lower interest rate will apply from the third withdrawal to the day before the anniversary of your account opening. From your anniversary the interest rate and withdrawals reset.

This Isa can be opened online with a deposit starting from £1,000 . For those who don’t want to download an app to get an Isa, which many of the top easy-access Isas require such Plum, Zopa and Chip, this is the best option. 

Fixed rate Isas

For savers who want the certainty of receiving a guaranteed interest rate before interest rates are cut again, a fixed-rate Isa could be the answer. 

Kent Reliance

Kent reliance has a one-year Isa paying 4.51 per cent over a one-year term. 

A saver putting £10,000 in this Isa would earn around £460 in interest by the end of the one-year term. 

The Isa can be opened online on Kent Reliance’s website with a minimum of £500. It can also be opened in a Kent Reliance branch. 

Bath Building Society

Bath Building Society’s Isa pays a market-leading 4.4 per cent over two years. A saver putting £10,000 in this Isa would earn around £918 in interest by the end of the two-year term.

This account can be opened online on Bath Building Society’s website with as little as £1. It can also be opened in a Bath Building Society branch.

One drawback of this Isa is that it does not accept transfers from other Isas. 

What about stocks and shares Isas? 

It is widely expected that Reeves will stage a capital gains tax raid to boost the Treasury’s coffers, so if you hold money in investments as well as cash savings, you could be in the firing line. 

Darius McDermott, managing director at Chelsea Financial Services, said: ‘With talk of capital gains tax on shares increasing from 20 per cent to 24 per cent for higher and additional rate taxpayers, now is the time to take full advantage of tax-efficient vehicles. 

‘Use your annual Isa allowance of £20,000 to keep your portfolio’s growth intact and shielded from the reach of potential future taxes. 

‘If you usually move money from a general investment account to an Isa at the end of each tax year, you may want to do so early before CGT rises.’

Rumours of a raid on capital gains tax have also led some investors to sell their shares ahead of the Budget, and then re-purchase then within a stocks and shares Isa. 

This arrangement is known as a ‘Bed and Isa’, but experts have warned that it could still result in a capital gains tax bill if the profit on the sale was more than £3,000.