Reeves’s plan to cut cash Isa limit could raise mortgage rates, say finance bosses

Rachel Reeves’s plan to slash the annual cash Isa limit by 40% could lead to higher mortgage rates and deter consumers from saving, finance bosses have said.

The chancellor is expected to cut the maximum amount people can put into tax-efficient cash individual savings accounts from £20,000 a year to £12,000 in Wednesday’s budget.

The Treasury has been examining the limit this year, sparking a fierce debate over whether it should scale back tax breaks on the popular savings accounts to encourage a shift from cash into stock market-based investments – in particular, British companies.

Reeves has talked about striking a “balance” between the amounts people can put into cash or shares, and wanting to create “more of a culture in the UK of retail investing like you have in the US”.

However,