Rachel Reeves is poised to announce a cut to the annual tax-free cash ISA allowance, according to multiple media reports this morning.
The Financial Times says the Chancellor is expected to confirm that she will reduce the £20,000 cap on the amount that can be shielded from tax in cash ISAs each year in her Mansion House speech on July 15.
Ms Reeves confirmed last month that she had no plans to reduce the total amount that can be paid into ISA products each year.
However, the cash ISA limit is understood to still be under threat, with the Chancellor having previously been urged by City bosses to reduce the allowance to as little as £4,000.
The Government wants to reform cash ISAs to push more people to invest in stocks and shares.
There has been intense lobbying on either side of the debate by building societies who use cash ISA savings to fund loans, and City firms keen to boost investment in the stock market.