Cash ISAs are changing from April 2027

At a glance

• From 6 April 2027, if you are under 65, the annual Cash ISA limit will reduce to £12,000.
• If you are 65 or over, you will still be able to use the full £20,000 allowance in Cash ISAs.
• The overall ISA allowance remains unchanged at £20,000.
• New rules will encourage the use of Stocks and Shares ISAs as an alternative for holding cash.

What is changing?

For individuals under 65, Cash ISAs will no longer be able to receive the full £20,000 ISA allowance each tax year. Instead, contributions into Cash ISAs will be limited to £12,000.

Cash can still be held within a Stocks and Shares ISA, but from April 2027, interest earned on cash in non-Cash ISAs will be subject to a flat 22% charge, applied through ISA providers. Put simply, the Government wants Stocks and Shares ISAs to be used primarily for investing rather than holding cash.

What does this mean for you?

If you are under 65 and regularly save more than £12,000 a year into Cash ISAs, it may be worth reviewing how you use your remaining ISA allowance before the new rules take effect.

For money you are unlikely to need for several years, a Stocks and Shares ISA may be worth considering, provided this is suitable for your objectives, timescale, and attitude to risk.

If you have any questions about investing in an ISA, please call us on 01676 523 550.