Earlier this year, the chancellor was thought to be mulling a reduction to the allowance for tax-free cash savings in a bid to encourage people to put money into stocks and shares instead and boost the economy.
Those plans were put on hold after strong opposition from banks, building societies and consumer campaigners.
Savers can put up to £20,000 a year in Isas in savings and investments, to protect the returns from being taxed.
The chancellor has said she intends to keep this limit in place, and it can currently be spread across products including cash Isas and stocks and shares Isas.
The proposed change specifically relates to cash Isas, and earlier this month the Financial Times reported the chancellor was considering reducing their tax-free amount to £10,000.
The purpose behind this would be to encourage investment.
The chancellor is facing a Budget shortfall of about £22bn, according to a recent estimate.
She is expected to raise taxes or cut spending in her November Budget in order to meet her self-imposed fiscal rules of not borrowing to fund day-to-day spending and to get government debt falling as a share of national income by the end of this parliament.
Cash Isas are the most widely used type of Isa. A total of £360bn is held in cash Isas across the country.
The committee’s report concluded that “cutting the cash Isa allowance is unlikely to incentivise people to invest their cash in stocks and shares”.
Chair of the Treasury Select Committee, Dame Meg Hillier, said: “This is not the right time to cut the cash Isa limit.”
“The Committee is firmly behind the chancellor’s ambition to create a culture in the UK where savers are sensibly investing their money and getting better returns through well-informed financial decisions,” she said.
“But we are a long way from that point.”