The Government has announced new changes to Individual Savings Accounts (ISAs) designed to encourage more long-term investing. Most allowances remain unchanged, but there are important new limits coming for Cash ISAs, particularly for people under 65.
Here’s a simple breakdown so you know what to expect.
The Key Points
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The overall annual ISA allowance will stay at £20,000.
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Cash ISA subscriptions for adults under 65 will be capped at £12,000 per year from April 2027.
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People aged 65 and over can still put up to the full £20,000 into Cash ISAs each year.
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Any unused allowance can still be placed into Stocks & Shares ISAs or other ISA types — meaning the total remains £20,000 overall.
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Transfers from Stocks & Shares ISAs into Cash ISAs will be banned for under-65s, meaning you can’t move your ISAs to get around the limit.
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The Government also plans new restrictions to prevent people from using their Stocks & Shares ISAs simply as a ‘Cash ISA substitute’. There will be a charge on interest earned on cash held within Stocks & Shares ISAs for under-65s.
How the Allowances Will Work From April 2027
| Age Group | Cash ISA limit | Total ISA allowance | Notes |
|---|---|---|---|
| Under 65 | £12,000 | £20,000 | Remaining £8,000+ can go to Stocks & Shares ISA |
| 65+ | £20,000 | £20,000 | No change — full amount can remain in cash |
Other ISA products remain unchanged:
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Lifetime ISA limit stays at £4,000 per year
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Junior ISA stays at £9,000 per year
What This Means for Clients
These changes may affect how clients save and invest — especially if they rely heavily on Cash ISAs.
Clients may want to:
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Consider using more of their ISA allowance through Stocks & Shares ISAs, particularly under 65s.
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Invest in Cash, or Money Market Funds. These offer a low-risk means of investing as they hold a range of cash and cash-like investments.
Take a look at the following:- Fidelity Cash Fund ~ Income Yield 4.70% p.a.
- Royal London Short Term Money Market ~Income Yield 6.43% p.a.
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Review existing ISA holdings and long-term plans before transfer restrictions apply.
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Make use of existing rules now, as the current £20,000 cash allowance remains until April 2027.
