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Cash Isa savings will be restricted.

The amount of money that can be saved tax-free each year in a cash Isa (Individual Savings Account) will be reduced from £20,000 to £12,000 a year for the under 65s.

Ministers want people to invest more, which comes with greater risk but could help boost growth - a key objective for the government.

There are questions over whether people would naturally put their money into stocks and shares Isas as a result of the less generous tax break on cash Isas.

The annual limit for savings in a cash Isa will be reduced for the under-65s.

New cash Isa limit will not apply to savers aged 65 and over and up to £20,000 cash can still be saved by those under 65 by using the cash component of other Isa products. Note: The increase in 2010-11 was staggered, with the new limits applying to the over-50s from Oct 2009. The increase to £15,000 in 2014 occurred in July rather than April.

About a quarter of those who save money into a cash Isa currently save more than £12,000 a year.

But many of those are pensioners, and the chancellor said the over-65s will still be able to save up to £20,000 in cash.

Separately, the Help to Save scheme, which helps those on low incomes and on universal credit to put money aside, will be extended from 2028.

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