With the autumn Budget looming, the Chancellor could make a major change to Cash ISAs. Rachel Reeves could slash the £20,000 limit to a smaller figure. Currently, the annual ISA limit is set at £20,000, and you can split this between cash and stock and shares ISAs.

However, on November 26, the ISA limit could be reduced, but reports vary as to how low it may be lowered. Savings expert Sylvia Morris, from This is Money and the Daily Mail, has expressed concerns over the potential plans and a potential “loophole”.

She says: “What I want to know is what would stop someone from putting up to their full allowance into a stocks and shares Isa and transferring it further down the line?”

Sylvia says that if the Chancellor wants to stop savers from doing this, she will have to add another layer of complexity to the ISA system to prevent them from moving their money around as they choose.

Those with an ISA are responsible for making sure they don’t exceed their limit in any one financial year.

With the onus on the individual, it could lead to further complexity in changing the limits.

Not only this, but for those who already have money in the stock market, it could make it harder for investors to take their profits.

Reeves’ change could see billions of pounds diverted from cash into domestic stocks. The model would operate similarly to the investment culture style in the USA.

But the change would not be one made without criticism. Earlier this year, when the idea was first discussed, opposition from banks, building societies and consumer campaigners meant any such move had been put on hold.

ISAs explained: 

Cash ISA: Similar to a normal savings account, except you don’t pay any tax on any interest earned. £20,000 limit.

Stocks and shares ISA: Also known as an investing ISA, it allows you to buy bonds, shares in companies, or other commodities such as gold through funds. Dividends and capital growth earned are not taxed. £20,000 limit.

Lifetime ISA: For use in either purchasing a first home or for retirement. The Government will top up your contributions by another 25%. £4,000 limit.