With ongoing uncertainty in global financial markets, governments are exploring new strategies to stimulate their domestic economies. In the UK, this has sparked discussions about potentially reshaping the popular Individual Savings Account (ISA) system — and some analysts believe gold could emerge as a compelling alternative savings vehicle.
Currently, UK investors can contribute up to £20,000 annually to ISAs without paying income or capital gains tax. However, the government is reportedly considering a proposal to reduce the contribution limit for cash ISAs to £10,000. The goal: encourage greater investment in UK-listed equities.
The proposal, put forward by New Financial — a financial markets think tank — argues that cash ISAs may be “too successful,” with savers hoarding nearly £300 billion collectively. Their report estimates that capping cash ISA contributions could redirect around £10 billion a year into UK equities, supporting broader economic growth.
“Stocks & shares ISAs have arguably not been particularly successful in building a broad-based investment culture despite the uniquely generous tax breaks they offer,” the report notes. “Cash ISAs may be encouraging too many people to save too much, when investing part of these savings might be more beneficial in the long run.”
Still, the idea faces skepticism. Critics argue that the move could undermine individual financial stability — especially for those uncomfortable with equity market volatility.
Paul Williams, Managing Director at UK-based bullion firm Solomon Global, sees a different outcome: a surge in gold investment.
“The proposal to cap cash ISAs might work well for the equity markets and give Chancellor Rachel Reeves a political win,” Williams told Kitco. “But for everyday savers, it offers little reassurance. Shares may grow over time, but not everyone wants the stress of market swings just to preserve their tax benefits.”
Williams adds that if the cap is implemented, more savers may turn to physical gold — particularly Capital Gains Tax-free legal tender coins such as Sovereigns, Britannias, and the Queen’s Beasts series — as a straightforward alternative. “Gold isn’t just about return,” he said. “It’s about preserving wealth, outside government whims.”
Evidence suggests this shift is already underway. According to the Royal Mint, physical bullion demand has surged. Bullion coin sales revenue rose 46% in Q1 2025 compared to the previous quarter — and a staggering 306% over Q4 of the 2023/24 financial year.
“Demand was driven by a combination of price momentum — gold reached all-time highs in GBP 17 times during the quarter — and the appeal of CGT-exempt bullion coins as a tax-efficient investment,” said Stuart O’Reilly, Market Insight Manager at the Royal Mint.
While second-quarter sales have moderated, the Mint remains on track for its second-best online bullion coin sales quarter ever. O’Reilly noted a robust two-way market, with increased selling driven by profit-taking — though purchases are still far outpacing sales, at a ratio of £6 bought for every £1 sold.
As the UK weighs changes to its savings framework, gold appears poised to play a growing role — offering a timeless hedge against inflation, volatility, and now, policy shifts.
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