Martin Lewis has issued a fiery response to reports that Rachel Reeves could make a major change to Cash ISAs. The Chancellor may cut the tax-free savings allowance from £20,000 a year to £10,000 a year to encourage people to invest, according to the Financial Times. However, MoneySavingExpert founder Martin Lewis argued that the move would only anger millions of people by increasing the tax on their savings and present problems for building societies.

He wrote on X: “In the meetings I’ve had, I’ve been told again and again they want to encourage, especially younger people, to invest. Yet a cash ISA cut would simply p**s millions of, often older, people off and I doubt will change the dial on investing. It’d just mean more tax paid on saving, and a problem for building societies raising cash for mortgages.

“If they were saying they were doing it to raise revenue, at least that would be a logical.”

Mr Lewis suggested “better education and better incentives” would encourage people to invest.

He proposed a scheme that would give young people a 10% bonus on the girst £2,000 they invest, and urged economic secretary to the Treasury Lucy Rigby to consider it.

He added: “What is needed is for them to encourage investment, better education, and better incentives, again in a recent meeting with @LucyRigby I proposed a younger person Starter Investment ISA bonus, of eg 10% added on the first £2,000 invested (funded by the investment firms).

“Have a recognised product, that can be communicated, which has a unique selling point to get people to dip their toe in the water and start to understand it.”

Under Ms Reeves’ reported changes, billions of pounds could be diverted from cash into domestic stocks.

An ally of the Chancellor said: “She wants to see people investing more in British stocks because it’s good for growth and it generates better returns for savers.

“But we can’t win the argument on our own. Lots of businesses support the idea but never say it.”