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A big cash ISA warning has been issued as the Labour Party government Chancellor Rachel Reeves revives her plan for a rule change. Chancellor Ms Reeves is looking to use her Budget to revive plans for a major overhaul of tax-free Isas.

The plan is to divert tens of billions of pounds of savings from cash into domestic stocks. The FT reports one option is to change the tax-free limit for cash ISAs — possibly halving it from £20,000 to £10,000 per year.

“She wants to see people investing more in British stocks because it’s good for growth and it generates better returns for savers,” one ally of Reeves said. “But we can’t win the argument on our own. Lots of businesses support the idea but never say it.”

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