This looks like the final chance to stuff your cash Isa… so should you? LEE BOYCE on savings shake-up

It's increasingly likely the £20,000 cash Isa limit will be reduced from the next tax year.

The Chancellor is expected to reveal this cut in her Mansion House speech on 15 July, although it looks like the overall tax wrapper limit won't be axed – meaning you can still invest the full allowance into a stocks and shares Isa.

You can't say we didn't warn you. In April 2024, before Labour came into power, I highlighted a paper from the Resolution Foundation suggesting a lifetime cap of £100,000 in Isas.

The chief executive of the thinktank at the time? Torsten Bell, now a Labour MP and the current Parliamentary Under-Secretary of State for Pensions.

This year, it's been clear Rachel Reeves has cash Isas in her sights, and it appears she wants savers to stop hoarding so much cash in them and instead turn to investing.

A cap looks unlikely, but a cut in what savers can tuck away looks nailed on.

Many, of course, already invest and save into a tax-free wrapper as they see fit – but clearly, cash Isas have become the 'safety first' cornerstone to financial planning for many.

A way to tuck away cash away from the taxman, crucial especially to higher rate and additional rate taxpayers, or those who have successfully built big pots over the decades.

Isas have been deemed too successful a savings product – the second best place to accumulate wealth after private pensions.

Now Isas are under attack. Would such a move turn savers into investors? I doubt it. Instead, they're likely to park savings in accounts where they might face a tax bill on the interest, or into NS&I products.

If you want to invest, it is already easy and fees incredibly low. But many simply just don't have an appetite for it, and that's their prerogative.

And even if they do, are they likely to invest in British stocks? You'd need a big incentive on offer for people to do that. Don't put all your eggs in one basket and all that.

Not many can max out the annual £20,000 allowance. Those who can – and even those who can't but tuck a healthy amount away - are likely to have shifted behaviour this year.

Namely, do the very opposite of what Rachel Reeves is proposing – one last chance to stuff their cash Isa with the full amount, even if they usually invest some of it.

You can see this shift in Bank of England statistics. It's no surprise that in April, £14billion flooded into cash Isas, the highest on record since it started recording this information.

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And figures this week show in May £3.9billion flowed into cash Isas – nearly £18billion in two months, way up on the usual activity.

If you listen to the This is Money podcast, you would have heard me in recent months predict a behaviour shift for this tax year. It doesn't surprise me in the slightest, given many conversations I've had with friends, family members and industry insiders in recent months.

Rumours are the allowance could be cut to £10,000, £5,000 or even £4,000 – no option currently off the table. If it fell as low as £4,000, this year's allowance essentially becomes five years' worth of future ones.

I think it's a shame goalposts are likely to be shifted on cash Isas, given that – unlike many financial products – most people understand them.

Why punish people for saving too well? More than four in five of our recently polled readers said they care about the cash Isa limit potentially being reduced.

I care too, because our readers are a savvy bunch who want to squeeze every inch out of their money and make it work hard for them. Moves like this seem completely unnecessary.

Firstly, read these two articles:

Rachel Reeves set to cut the cash Isa savings limit - what would mean it mean for you?

Labour is staging a pincer movement on your savings - here's what you must do NOW before cash Isas are crushed

Then you can hunt out the best buy deals. We've laid them out below, in our rolling round-up:

Five of the best cash Isas: We pick the top fixed-rate and easy-access deals

You will find plenty options for savers looking to earn 4 per cent or more on their tax-free cash.

You can read the weekly column from Simon Lambert and Lee Boyce, first, at 6am on a Thursday by signing up to the This is Money newsletter below: