Savers 'prime targets' for investment scams when cash Isa limit is cut, banking insider warns

Have you lost money to an investment scam? Email: l.evans@dailymail.co.uk See more This is Money on Google - save us as a Preferred Source Updated: 02:00 EDT, 25 August 2026 Savers hit by the cut to the cash individual savings account allowance from April will be 'prime targets' for investment scammers, a bank has warned.Pernicious tricksters are poised to conjure up clever ways to get new investors to part with their hard-earned cash, top brass at Starling Bank say.Former Chancellor Rachel Reeves announced in November's Budget that the £20,000 cash Isa allowance for savers under 65 would be slashed to £12,000.Bernadette Smith, chief banking officer at Starling Bank, told This is Money: 'From April we'll see a number of consumers with a surplus of cash due to the reduction in the cap and they are going to be looking for places to put that money. 'They used to put that money in cash Isas.'And with the Government's new investment drive – fronted by 'Savvy the Squirrel' – it's likely savers will start dabbling with equities, bonds and funds.But crooks are expected to take advantage of these newbie investors by targeting them with sophisticated investment scams. Tricksters will take advantage of savers looking for safe places to put their money from AprilThis is where fraudsters convince you to hand over your money for a promising investment with unreasonably high or guaranteed returns for next to no risk – but in reality these investments are worthless or don't exist.Investment scams are already soaring in number. Last year saw record amounts lost to these phoney deals, with victims handing over £221.5million, according to data from industry body UK Finance.They trumped every other type of scam when it came to losses, and case numbers also rose by 26 per cent to almost 14,893 – the highest ever amount.It means the victim in each of the reported scams lost almost £15,000 to the crooks, on average.In reality, both the losses and cases could be far higher as victims often don't report the scam and sometimes they don't realise they have been swindled.From April, case numbers are only set to soar in number, according to Starling Bank.Dodgy deals may come in the form of fake corporate bonds offering a high or guaranteed rate of return as scammers aim to lure in savers looking for a safe home for their money post cash Isa cap.Ms Smith adds: 'If you have a consumer presented with a 3 per cent savings rate compared to an 8 to 12 per cent guaranteed return and consider the different consumer concerns right now – such as the cost of living and dire economic outlook - it creates a perfect storm.'Fraudsters may even tempt die-hard cash savers by offering them fake schemes to bypass the new cap on cash Isa savings or the 22 per cent tax charge on cash held in a stocks and shares Isa, says Ms Smith.How to spot a bogus dealSavers should beware any unsolicited approaches with too-good-to-be-true offers.If you receive a cold call, email, text or social media message about an investment opportunity, it's highly likely to be a scam.Tricksters will typically state that the investment is foolproof with guaranteed returns, or that you'll still own the underlying asset if the deal goes south.Returns will often be much higher than other types of investments, too.Also beware of any pressure – a legitimate Isa manager will never pressure you to transfer money.The full £20,000 Isa allowance is still available for the stocks and shares account. If you still want to invest that surplus cash, open a stocks and shares Isa with a reputable investment platform and choose investments there.DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you