The government announced a flurry of ISA initiatives which, while doing nothing to simplify the rules around individual savings accounts, allowed the chancellor to claim he was helping savers.

In a u-turn that frustrated some ISA providers that had prepared for a cut in the cash ISA allowance announced by his predecessor Rachel Reeves a year ago, the chancellor cancelled the reduction to £12,000 from £20,000 that savers can stash away free of tax.

“To continue providing generous support for savers, the government has decided not to reduce the cash ISA limit, so that it remains at £20,000,” the Treasury said of a move that will cost the Exchequer £70m by 2031.

Kristina Church, head of corporate sustainability at Aberdeen, a stocks and shares ISA provider, said: “This is the right decision. You don’t build an investment culture by making it harder to save in cash, you build it by growing financial confidence. Two fifths of UK adults have poor financial literacy, and over half struggle with concepts like investment diversification.”

Having welcomed the financial services industry’s “Invest for the Future” advertising campaign earlier this year, the Treasury also said it would consult on a new incentive, or bonus, to encourage new investors into stocks and shares ISAs.

The Association of Investment Companies welcomed the news but was disappointed the chancellor had not cut stamp duty on ISAs and pensions which it has long argued discourages investment in the UK stock market. “With the UK stock market under pressure, a lack of action continues to leave the door open to overseas bargain hunters,” said AIC chief executive Richard Stone.

The Treasury also plans a First Time Buyer ISA to replace the Lifetime ISA for new savers from 6 April 2029.

It said the new account would continue the Lifetime ISA’s record of accepting annual contributions of up to £4,000 that the government would top up with a 25% bonus when the money was withdrawn for a first home purchase up to the value of £450,000, so avoiding the need for a withdrawal charge. Unlike Lifetime ISAs, which were restricted to those under 40, the new product will have no upper age restriction. Its introduction will cost an estimated £235m by 2031.

One small improvement was made to Lifetime ISAs with the withdrawal charge for first-time buyers purchasing properties above £450,000 reduced from 25% to 20%.