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What is an Isa and how might the rules change?

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Kevin Peachey

Cost of living correspondent

Getty Images Woman sits at a desk with paperwork and a laptop in front of her. A smartphone in her hand has a calculator on the screen.Getty Images

Chancellor Rachel Reeves is expected to announce changes to tax-free Individual Savings Accounts (Isas) on Tuesday.

It its thought she may set out new rules to encourage more investment in stocks and shares Isas.

What are Isas and how much money can you save in them?

An Individual Savings Account (Isa) is a savings or investment product which is treated differently for tax purposes.

Isas are offered by a host of banks, building societies, investment companies and other financial providers.

Any returns you make from an Isa are tax-free, but there is a limit to how much money you can put in each year.

The current £20,000 annual allowance can be used in one account or spread across multiple Isa products as you wish.

These accounts do not close automatically at the end of the tax year. When the next tax year begins, you can open a new Isa or – in some cases – can keep adding money to your existing accounts.

You have to be 18 to open an Isa. You also have to live in the UK or be a member of the armed forces or a so-called Crown servant who works abroad.

Isas were first introduced by then-chancellor Gordon Brown in 1999, but the annual allowance and the way they work have changed several times since then.

What is the difference between cash Isas and stocks and shares Isas?

Cash Isas are typically offered by banks or building societies, and function like a normal savings account.

Savers pay in money and interest gets added on top.

With regular saving accounts, once the interest goes above a certain threshold, you start to pay income tax.

A basic rate taxpayer can earn £1,000 in savings interest a year before paying tax. For higher rate taxpayer the limit is £500, but additional rate taxpayers don’t have any allowance – they pay tax on all their savings income. Those on low incomes may get an extra allowance.

When the money is saved in a cash Isa, the interest is tax-free, however much you earn.

Cash Isas are very popular, with millions of savers holding billions of pounds in them.

Stocks and shares Isas work in much the same way.

However, instead of simply being held in an savings account, the money is invested in shares in companies, unit trusts, investment funds or bonds.

Unlike other investments any returns are protected from income tax and capital gains tax.

Crucially, while the returns can be greater, so too are the risks. The amount of money you have in a shares Isa can go down as well as up.

What other types of Isa are available?

Junior Isas allow young people to save – or let their parents save for them – until they reach 18 – when they can access regular Isas.

Lifetime Isas (Lisas) are designed to help people save towards a deposit when buying a first home, or for retirement. Savers can put in up to £4,000 a year and the government adds an extra 25%.

However, critics argue the rules about how they work are too strict, and some savers have fallen foul of property purchase price limits.

Innovative Finance Isas let people use other types of financial arrangements such as peer-to-peer loans, without going through a bank.

How might the Isa rules change?

Despite a lot of media speculation, the chancellor has not yet set out her plans.

Documents released by the Treasury as part of the Spending Review in June said only that the government was “looking at options” for Isa reform.

It wants to “get the balance right between cash and equities [shares] to earn better returns for savers, boost the culture of retail investment, and support the growth mission”.

However, there is an expectation that Reeves will make an announcement at the annual Mansion House speech in the City of London on 15 July.

Many experts think she will reduce the annual allowance for putting money into a cash Isa.

Some have argued that she should scrap cash Isas completely, but that is considered extremely unlikely.

Why might the government cut the cash Isa limit?

It is thought the government wants to encourage savers to put money into stocks and shares Isas instead of cash Isas. This could potentially benefit British companies, and boost economic growth in the UK.

Many investment companies which sell stocks and shares Isas back the change, while banks and building societies who dominate the cash Isa market are against it.

Those in favour say there are billions of pounds languishing in savings accounts, which do not need to be accessed in a hurry.

They say that money could be better used for personal, and the greater, good by being invested in stocks and shares in the long-term, rather than sitting in savings accounts.

They want any change to the Isa rules to go hand-in-hand with other reforms to encourage personal investing.

What are the pitfalls of cutting the cash Isa allowance?

Opponents say there is little evidence that the move would encourage people to invest in shares instead of saving in cash.

They warn many people may not save at all, or would simply pay more tax on any money held in non-Isa accounts.

Building societies, in particular, point out it would also reduce the amount of money they receive from savers’ deposits which can then be lent out as mortgages or other loans.

As a result, the cost of borrowing could rise.



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National Trust to cut 550 jobs after Budget pushes up costs

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The National Trust has announced plans to cut 6% of its current workforce, about 550 jobs, partly blaming an inflated pay bill and tax rises introduced by Chancellor Rachel Reeves.

The heritage and conservation charity said it was under “sustained cost pressures beyond our control”.

These include the increase in National Insurance contributions by employers and the National Living Wage rise from April, which the National Trust said had driven up wage costs by more than £10m a year.

The cost-cutting measures are part of a plan to find £26m worth of savings.

“Although demand and support for our work are growing with yearly increases in visitors and donations; increasing costs are outstripping this growth,” the charity said in a statement.

“Pay is the biggest part of our costs, and the recent employer’s National Insurance increase and National Living Wage rise added more than £10m to our annual wage bill.”

A 45-day consultation period with staff began on Thursday and the Trust – which currently has about 9,500 employees – said it was working with the Prospect union “to minimise compulsory redundancies”.

Prospect said though cost pressures were partly to blame, “management decisions” also contributed to the Trust’s financial woes.

The union’s deputy general secretary, Steve Thomas, said “once again it is our member who will have to pay the price”.

“Our members are custodians of the country’s cultural, historic and natural heritage – cuts of this scale risk losing institutional knowledge and skills which are vital to that mission,” he said.

The Trust is running a voluntary redundancy scheme, and is expecting that to significantly reduce compulsory redundancies, a spokeswoman said.

The job cuts will affect all staff from management down, and everyone whose job is at risk will be offered a suitable alternative where available, the spokeswoman added.

Following consultations, which will finish in mid-to-late August, the cuts will be made in the autumn.

Chancellor Rachel Reeves announced the rise in National Insurance contributions by employers in last October’s Budget.

But the move led to strong criticism from many firms, with retailers warning that High Street job losses would be “inevitable” when coupled with other cost increases.

The hike in employer NICs is forecast to raise £25bn in revenues by the end of the parliament.



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GPTBots.ai’s Business AI Agent Solutions at The MarTech Summit Hong Kong

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As enterprises worldwide race to adopt AI, GPTBots.ai made its mark at The MarTech Summit Hong Kong, Asia’s premier marketing technology conference attended by world-renowned brands such as JPMorgan, Yahoo, Nike, and DBS, alongside leading Hong Kong enterprises including Cathay Pacific, Hong Kong Disneyland, and The Hong Kong Jockey Club.

With 85% of enterprises prioritizing AI adoption in 2024 (Gartner), yet struggling with implementation gaps, GPTBots.ai demonstrated how its no-code AI Agent platform turns complex AI concepts into deployable solutions—without coding or data science teams.

Spotlight: Real-World AI in Action
At the summit, GPTBots.ai engaged with forward-thinking organizations, including:
A Top Hong Kong University: Their admissions team explored AI-powered chatbots to streamline student inquiries and application processes, aiming to:

  • Automate 80% of FAQs (e.g., program requirements, deadlines).
  • Guide applicants through form-filling with smart error detection.
  • Free staff to focus on students’ in-depth support.

A Leading Hong Kong Airline: Their tech team discussed internal efficiency AI Agents for:

  • AI search to make enterprise knowledge instantly accessible and empower every role.
  • Reducing IT helpdesk tickets by 50% via self-service troubleshooting.

Why GPTBots.ai Stood Out

  • Enterprise-Ready: Built to adapt to your business, no matter the size or complexity.
  • Proven at Scale: Powers AI Agents for financial services, healthcare, and retail giants.
  • End-to-End Capabilities: From strategy to deployment, we manage every step of your AI journey.

“The gap isn’t AI potential—it’s practical adoption,” said Tanya Quan, Marketing Director at GPTBots.ai. “We’re helping enterprises skip the lab and go straight to ROI.”

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Misinformation was a problem during the Texas floods. AI chatbots weren’t always helping

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When deadly flash floods hit central Texas last week, people on social media site X turned to artificial intelligence chatbot Grok for answers about whom to blame.

Grok confidently pointed to President Trump.

“Yes. Trump’s 2025 cuts slashed NOAA/NWS funding by ~30% and staff by 17%, impairing forecast accuracy. Warnings underestimated rainfall, contributing to inadequate alerts for the flash floods that killed 24 and left ~24 Camp Mystic girls missing, presumed dead in ongoing searches,” Grok said in a post on Saturday before the death toll rose to at least 120.

Facing backlash from X users that it jumped to conclusions and was “woke,” the chatbot then backtracked.

“That screenshot is a fabrication—I never posted it. Actual facts: Trump’s 2025 NOAA cuts reduced funding ~30% and staff 17%, raising concerns (Axios, Fox). Texas floods killed 43+, with warnings issued hours ahead (CNN), but rainfall underestimated. No evidence directly ties cuts to deaths yet; investigation ongoing. Truth matters,” Grok said in another post.

The contradictory remarks show how AI chatbots can sometimes offer straightforward but inaccurate answers, adding confusion to online chatter already filled with falsehoods and conspiracy theories.

Later in the week, Grok had more problems. The chatbot posted antisemitic remarks and praised Adolf Hitler, prompting xAI to remove the offensive posts. Company owner Elon Musk said on X that the chatbot was “too eager to please and be manipulated,” an issue that would be addressed.

Grok isn’t the only chatbot that has made inappropriate and inaccurate statements. Last year, Google’s chatbot Gemini created images showing people of color in German military uniforms from World War II, which wasn’t common at the time. The search giant paused Gemini’s ability to generate images of people, noting that it resulted in some “inaccuracies.” OpenAI’s ChatGPT has also generated fake court cases, resulting in lawyers getting fined.

The trouble chatbots sometimes have with the truth is a growing concern as more people are using them to find information, ask questions about current events and help debunk misinformation. Roughly 7% of Americans use AI chatbots and interfaces for news each week. That number is higher — around 15% — for people under 25 years old, according to a June report from the Reuters Institute. Grok is available on a mobile app but people can also ask the AI chatbot questions on social media site X, formerly Twitter.

As the popularity of these AI-powered tools increase, misinformation experts say people should be wary about what chatbots say.

“It’s not an arbiter of truth. It’s just a prediction algorithm. For some things like this question about who’s to blame for Texas floods, that’s a complex question and there’s a lot of subjective judgment,” said Darren Linvill, a professor and co-director of the Watt Family Innovation Center Media Forensics Hub at Clemson University.

Republicans and Democrats have debated whether job cuts in the federal government contributed to the tragedy.

Chatbots are retrieving information available online and give answers even if they aren’t correct, he said. If the data they’re trained on are incomplete or biased, the AI model can provide responses that make no sense or are false in what’s known as “hallucinations.”

NewsGuard, which conducts a monthly audit of 11 generative AI tools, found that 40% of the chatbots’ responses in June included false information or a non-response, some in connection with some breaking news such as the Israel-Iran war and the shooting of two lawmakers in Minnesota.

“AI systems can become unintentional amplifiers of false information when reliable data is drowned out by repetition and virality, especially during fast-moving events when false claims spread widely,” the report said.

During the immigration sweeps conducted by the U.S. Immigration and Customs Enforcement in Los Angeles last month, Grok incorrectly fact-checked posts.

After California Gov. Gavin Newsom, politicians and others shared a photo of National Guard members sleeping on the floor of a federal building in Los Angeles, Grok falsely said the images were from Afghanistan in 2021.

The phrasing or timing of a question might yield different answers from various chatbots.

When Grok’s biggest competitor, ChatGPT, was asked a yes or no question about whether Trump’s staffing cuts led to the deaths in the Texas floods on Wednesday, the AI chatbot had a different answer. “no — that claim doesn’t hold up under scrutiny,” ChatGPT responded, citing posts from PolitiFact and the Associated Press.

While all types of AI can hallucinate, some misinformation experts said they are more concerned about Grok, a chatbot created by Musk’s AI company xAI. The chatbot is available on X, where people ask questions about breaking news events.

“Grok is the most disturbing one to me, because so much of its knowledge base was built on tweets,” said Alex Mahadevan, director of MediaWise, Poynter’s digital media literacy project. “And it is controlled and admittedly manipulated by someone who, in the past, has spread misinformation and conspiracy theories.”

In May, Grok started repeating claims of “white genocide” in South Africa, a conspiracy theory that Musk and Trump have amplified. The AI company behind Grok then posted that an “unauthorized modification” was made to the chatbot that directed it to provide a specific response on a political topic.

xAI, which also owns X, didn’t respond to a request for comment. The company released a new version of Grok this week, which Musk said will also be integrated into Tesla vehicles.

Chatbots are usually correct when they fact-check. Grok has debunked false claims about the Texas floods including a conspiracy theory that cloud seeding — a process that involves introducing particles into clouds to increase precipitation — from El Segundo-based company Rainmaker Technology Corp. caused the deadly Texas floods.

Experts say AI chatbots also have the potential to help people reduce people’s beliefs in conspiracy theories, but they might also reinforce what people want to hear.

While people want to save time by reading summaries provided by AI, people should ask chatbots to cite their sources and click on the links they provide to verify the accuracy of their responses, misinformation experts said.

And it’s important for people to not treat chatbots “as some sort of God in the machine, to understand that it’s just a technology like any other,” Linvill said.

“After that, it’s about teaching the next generation a whole new set of media literacy skills.”



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