Chancellor Rachel Reeves is expected to announce a reduction in the annual tax-free cash Individual Savings Account (ISA) allowance from the current £20,000 to as low as £5,000 in her upcoming Mansion House speech. This move follows a government retreat on welfare reform, which has created a £6 billion shortfall in planned savings. Cabinet Office minister Pat McFadden and Reeves herself have indicated that this financial gap will likely necessitate tax increases in the forthcoming autumn budget. Reeves has warned that the tax rises could be more challenging than the £40 billion package introduced in November. The potential tax increases may affect income tax, National Insurance, or VAT, with middle earners expected to bear a considerable portion of the burden. The decision to water down the welfare reform bill and the associated costs have drawn criticism and sparked debate about the government's fiscal strategy and its impact on savers and taxpayers.