Cash ISA changes from April 2027
From 6 April 2027, people under 65 will be able to pay no more than £12,000 a year into cash ISAs. The overall £20,000 allowance is not changing. This guide sets out what the regulations and HMRC's notes say so far.
Last updated:
What is changing
In 2026/27 you can pay up to £20,000 into ISAs and put all of it in cash if you want to. From 6 April 2027:
- if you are under 65, no more than £12,000 of your £20,000 can go into cash ISAs in a tax year
- if you are 65 or over, you keep the full £20,000 for cash. This applies from the start of the tax year in which you turn 65
The change was announced at the Autumn Budget in 2025. HMRC's note gives the aim as encouraging more people to invest and improving long-term returns for savers. It also says that in 2022 to 2023, 22% of cash ISA savers under 65 paid in more than £12,000.
What stays the same
- The overall limit of £20,000 a year across all your ISAs.
- The limits for stocks and shares ISAs, innovative finance ISAs and Lifetime ISAs. A Lifetime ISA still takes up to £4,000 a year, inside the £20,000.
- The rules for 2026/27. Until 5 April 2027 you can still pay the whole £20,000 into cash.
- Transfers from one cash ISA to another.
- ISA interest is still tax-free, and you still do not declare it to HMRC.
The new figure is a limit on what you pay in during a tax year. It is not a limit on what you hold, so money already in cash ISAs does not count towards it.
The rules that stop people getting round it
The regulations add three rules, so that the lower limit cannot be avoided by using another type of ISA to hold cash.
- No transfers into cash. If you are under 65, you will not be able to transfer money from a stocks and shares ISA or an innovative finance ISA into a cash ISA. You can still transfer the other way, from cash into investments.
- A charge on interest. Interest paid on cash held inside a stocks and shares ISA or an innovative finance ISA will have a flat 22% charge. On £100 of interest that is £22. Your ISA provider pays it to HMRC, and it applies whatever your age.
- A limit on money market funds. A stocks and shares ISA cannot be made up entirely of money market funds. Shares, funds, investment trusts and bonds, including gilts, are not treated as cash-like. This rule does not apply to Junior ISAs.
Worked examples for 2027/28
You are under 65 and want £20,000 in cash
You can pay £12,000 into cash ISAs. The other £8,000 of your allowance can only go into a stocks and shares ISA, an innovative finance ISA or, if you are eligible, a Lifetime ISA (up to £4,000). Cash saved outside an ISA is not affected by any of this, but the interest on it can be taxed.
You save £500 a month into a cash ISA
That is £6,000 a year, which is under £12,000. Nothing changes for you.
You turn 65 in January 2028
Your birthday falls in the 2027/28 tax year, so you have the full £20,000 for cash from 6 April 2027, the first day of that tax year.
You pay £15,000 into a cash ISA in 2026/27
That is allowed. The £12,000 limit does not apply until 6 April 2027.
Where things stand
- November 2025: the change is announced at the Autumn Budget.
- 23 June 2026: the government publishes the rules to stop the limit being avoided.
- 25 June to 2 August 2026: the draft regulations are put out for consultation.
- 14 September 2026: the Individual Savings Account (Amendment) (No. 2) Regulations 2026 are laid before Parliament. They come into force on 6 April 2027.
- 17 September 2026: HMRC publishes its note on who is affected.
HMRC says it will publish updated guidance for ISA providers before 6 April 2027. When this guide was last updated, gov.uk's main ISA pages still described the 2026/27 rules and did not mention the change.
Common questions
Do I have to move money out of my cash ISAs?
No. The limit is on new money you pay in each tax year.
I am 64. When do I get the higher limit?
From the start of the tax year in which you turn 65, not from your birthday.
Is the Lifetime ISA limit changing?
No. It stays at £4,000 a year.
Will I have to pay the 22% charge myself?
No. Your ISA provider pays it to HMRC. You do not need to declare ISA interest.
Check your allowance
The ISA allowance calculator shows how much of your £20,000 is left across cash, stocks and shares and Lifetime ISAs. It uses the 2026/27 rules.
Where this comes from
All from gov.uk: HMRC's note on the reduction in the cash ISA limit, the factsheet on the rules for 2027, Tax-free savings newsletter 23, the consultation on the draft regulations and the pages on Individual Savings Accounts.