Chancellor considering 'changes' to ISAs

The chancellor has confirmed she is considering "changes" to ISAs - and said there has been too much focus on the "risk" of consumers investing.

In her second annual Mansion House speech to the financial sector, Rachel Reeves said she recognised "differing views" over the popular tax-free savings accounts, in which savers can currently put up to £20,000 a year. She was reportedly considering reducing the annual limit for cash ISAs to as low as £4,000 a year, in a bid to encourage people to put money into stocks and shares instead.

However, the chancellor has shelved any immediate planned changes after a fierce backlash from building societies and consumer groups. In her speech to key industry figures on Tuesday, Ms Reeves said: "I will continue to consider further changes to ISAs, engaging widely over the coming months and recognising that despite the differing views on the right approach, we are united in wanting better outcomes for both savers and for the UK economy." She added: "For too long, we have presented investment in too negative a light, quick to warn people of the risks, without giving proper weight to the benefits." Read analysis from our economics editor Ed Conway Ms Reeves's speech, the first major one since the welfare bill climbdown two weeks ago, appeared to encourage regulators to focus less on risks and more on the benefits of investing in things like the stock market and government bonds (loans issued by states to raise funds with an interest rate paid in return).

She welcomed action by the financial regulator to review risk warning rules and the campaign to promote retail investment, which the Financial Conduct Authority (FCA) is launching next year. "Our tangled system of financial advice and guidance has meant that people cannot get the right support to make decisions for themselves.