John Healey’s first Budget as chancellor came with a few surprises, including the decision to reverse Rachel Reeves’ plan to limit cash ISA subscriptions and the plan to launch a new starter ISA for new investors.

The former chancellor’s attempt at ISA reform was considered too forceful and likely to be ineffective in convincing more Britons to start investing rather than only saving cash.

To that end, Mr Healey announced several changes aimed at smoothing the path for new investors – while those looking to utilise tax-free savings to buy property also received further details about the upcoming First Time Buyer (FTB) ISA.

That will replace the Lifetime ISA in the coming years, though there was also a slight boost to those using that product with a much-requested change being made.

Here’s everything we know so far about what is changing across the ISA landscape.

Mr Healey only briefly mentioned the FTB ISA in his Budget speech, but further details given by the Treasury revealed a planned launch in April 2029, the ongoing £4,000 limit for contributions per year and the continuation of £450,000 property price cap, despite calls for that price limit to be raised or regionalised.

A notable change from earlier proposals is that the government bonus of 25 per cent, while still being applied at the moment of purchase, will now be worked out on the final total balance, rather than payments into the ISA. This will ensure savers do not miss out on the increase to their savings through interest or capital growth.

If you already have a Lifetime ISA (LISA), you can still open a FTB ISA but transfers between the two won’t be allowed, to avoid a “doubling up” scenario on the government bonus.

For those who have a LISA, there is one welcome change: the 25 per cent penalty for withdrawals other than house purchases under £450,000 (or for retirement) is being dropped to 20 per cent.

This avoids savers being punished by losing some of their own money, beyond just the government bonus.

The LISA is still on course to be stopped in April 2029, but you can still open one before then if eligible.

The big cash ISA change was known ahead of the Budget, with the planned reduction from £20,000 to £12,000 per person each year being scrapped.

The reversal has been mostly positively received, with Jazz Gakhal, CEO of Money at Skipton Building Society, saying: “The chancellor’s decision to retain the existing cash ISA allowance is welcome news for savers across the country. Cash ISAs play an important role in helping people build financial security, while also providing vital funding for mortgage lending, including to first-time buyers.

“We support the ambition to encourage more people to invest but believe the best way to achieve that is through better financial education and access to advice, rather than restricting choice for savers.”

One as-yet-unknown ISA looks set to be added to the current set of options: a starter ISA which is intended to be a better bridge into investing for those who don’t yet do so.

Details are scant at present, but understands that an industry-wide consultation will take place in the coming months.

It is likely that those with any kind of ISA already open, but who haven’t previously invested, will get some sort of additional benefit, bonus or education to ease their path from saving to investing.

Brian Byrnes, director of personal finance at Moneybox, said: “Individual policy changes are certainly part of the puzzle to get more people investing, but to truly make the UK a nation of investors requires a joined-up, 10-year strategy that builds trust and removes friction. While we are cautiously optimistic about the direction of travel to incentivise investing rather than to punish saving, adding yet another ISA to an already complex ecosystem does set off alarm bells.

“We have previously called for government-backed incentives to invest, like that seen in the stocks and shares Lifetime ISA, to encourage more people that could benefit from long term investing but have yet to take the first step.

“This must go hand in hand with improving access to affordable regulated financial guidance to make investing feel achievable and relevant for people of all ages.”

That includes 22 per cent tax being charged on interest earned on cash, and cash-like assets, held within those stocks and shares ISAs.

But with the cash ISA limit now not being lowered, that seems an unnecessary alteration.