Long rumoured changes to Cash ISAs could be confirmed by Chancellor Rachel Reeves in just over three weeks.

Speculation has run rampant for the past month that the government could target Cash ISAs, a type of bank account which protects up to £20,000 of deposits from tax on interest, in a bid to 'boost growth'. If enacted, annual deposit limits could be reduced to as little as £4,000, which was the amount suggested by pensions firm Fidelity. It is hoped that savers would turn to stocks and shares ISAs instead of holding cash.

Reeves is due to make a spring statement on March 26, where it is thought she would announce any Cash ISA changes.

She had previously told broadcasters: “It’s really important that we support people to save to achieve their aspirations.

“At the moment, there is a £20,000 limit on what you can put into either cash or equities (ISAs) but we want to get that balance right.

“I do want to create more of a culture in the UK of retail investing like what you have in the United States, to earn better returns for savers.”

Currently, Cash ISAs allow savers to put away up to £20,000 a year tax-free without owing any tax to HMRC.

Workers are able to earn £1,000 in savings interest tax-free, but this is cut to just £500 if you earn over £50,270 and £0 if you earn £125,000.

With savings rates hitting 5%, it would take just £10,000 in savings for a higher earner (£50k+) to be made to pay tax on the interest, and just £20,000 for a basic rate taxpayer, in a single year, but a Cash ISA shields all money paid into these accounts from being taxable by HMRC.

Hargreaves Lansdown told savers to get ahead of rumoured changes by ‘acting now’.

It said: “Rumours are circulating that Rachel Reeves could cut Cash ISAs in the Spring Statement on 26 March.

“If you’re planning to open a Cash ISA this year, it’s best to act now, rather than leave it to the last minute."

The Treasury has said it would not want to preempt any announcement from the Chancellor but it has confirmed that all aspects of the savings are being kept 'under review'.

Reeves has not ruled out scrapping Cash ISAs completely but savings providers have cautioned against such sweeping changes.

The Building Societies Association called on the government to ‘save cash ISAs'.

In an open letter to Rachel Reeves, chief executive Robin Fieth said that Cash ISAs play an ‘integral role’ for savers.

The letter said: I am writing to put on record how strongly we disagree with the recently reported calls from City firms to restrict Cash ISAs. We urge you to maintain this important savings incentive.

“Cash ISAs are a long-established cornerstone of the UK savings landscape, that are well understood and upon which many people rely.

“The implication made by many of those calling for curbs on Cash ISAs is that the savings are lying idle and not supporting economic growth. But banks, building societies, credit unions and other providers use the deposits to fund loans to households and businesses. Substantially reducing the role of Cash ISAs would have knock-on impacts on the price and availability of these loans if providers had to replace the funds from other sources.”