Savings providers vow to fight any attempt to cut cash Isa limit to £4,000

Rachel Reeves understood to be considering proposal to reduce annual allowance from current 20,000

Major savings providers have pledged to fight any attempts to cut tax breaks on cash Isas after it emerged the government was considering a proposal to slash the maximum amount that people can put into them from 20,000 a year to 4,000.

In recent weeks a row has broken out over whether ministers should scale back tax breaks on the popular savings accounts. The chancellor, Rachel Reeves, is being lobbied by some fund managers to put more focus on the riskier practice of investing in the stock market as a way of boosting economic growth.