Cash ISA changes from April 2027
Find out what is changing to cash ISAs from April 2027 and how to prepare.
What was announced
At the Autumn Budget 2025, the government confirmed a significant change to cash ISAs. From 6 April 2027, if you are under 65, the amount you can pay into a cash ISA each tax year falls to £12,000.
Your overall ISA allowance stays at £20,000 per tax year. That means the remaining £8,000 can only go into other ISA types, such as stocks & shares ISAs or Innovative Finance ISAs.
If you are 65 or over, nothing changes for you. You keep the full £20,000 cash ISA allowance. This applies from the start of the tax year in which you turn 65.
For most working-age savers, this is the biggest ISA rule change in years. It does not remove cash ISAs, but it limits how much new money you can put into them each year.
What is NOT changing
If you already have money in a cash ISA, it is not affected. Your existing balance stays where it is and remains tax-free.
The £20,000 overall ISA allowance is unchanged. You can still split it across different ISA types in the same tax year, subject to each product's own limits (such as the £4,000 Lifetime ISA cap).
Transfers between cash ISA providers remain allowed. If you find a better rate elsewhere, you can move your balance without losing the tax-free status. The limits for stocks & shares ISAs, Innovative Finance ISAs and Lifetime ISAs all stay the same.
In short, this is a cap on new cash contributions for younger savers, not a raid on money you have already saved.
The catches to know about
From April 2027, if you are under 65, you will no longer be able to transfer money from a stocks & shares ISA or an Innovative Finance ISA into a cash ISA. That route closes.
There is also a new charge on cash held inside non-cash ISAs. If you park spare cash in a stocks & shares ISA hoping to use the full allowance as cash, interest on that cash will face a 22% charge. It is not a loophole.
These rules are designed to work together. The cash cap pushes younger savers toward investing, and the transfer and interest restrictions stop easy workarounds.
What you can do before April 2027
The 2026/27 tax year (ending 5 April 2027) is the last year most savers can put the full £20,000 into cash. If you want to maximise tax-free cash savings, use this year's allowance before the deadline.
You can compare current cash ISA rates on our ISA comparison page to find a competitive home for your savings.
Why the government is doing this
The stated aim is to encourage more long-term investing in UK markets rather than holding large amounts in cash.
Whether you agree with that policy is up to you. Either way, understanding the reasoning helps you plan. The change is deliberate, not an accidental side effect of other reforms.
Related guides
This is general information, not financial advice. Check GOV.UK for official details that apply to your situation.