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Chancellor Rachel Reeves is set to announce a more modest reduction to the cash ISA allowance following intense pressure from building societies, according to reports.

Speculation has been rife that the current £20,000 limit on cash ISAs could be slashed to as little as £10,000 as part of measures designed to encourage more people to invest in stocks and shares.

Following a backlash from high-street savings bosses, the Treasury has been considering a less severe cut to £12,000 annually, according to the Financial Times. Ms Reeves may also consider adjusting the rules around stocks and shares ISAs in the forthcoming Budget on November 26.

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