The cut in the Cash ISA allowance was widely predicted, and in fact the new limit of £12,000 is not as low as some were suggesting it would be. The retention of the £20,000 for people aged over 65 was unexpected and welcome, as investment timelines for people at this stage in their lives are different to those of younger people saving for the future.
Whether the move will result in more savers investing in UK Plc remains to be seen. Those who do put the remaining £8,000 in a Stocks and Shares ISA are likely to be buying into a generic fund which is more global in nature; if specific UK only ISAs are created, they will have a very different risk profile, and one which is unlikely to be attractive to someone whose initial preference would have been a Cash ISA.