What is changing with cash ISAs in April 2027?

From 6 April 2027, if you are under 65 you can pay no more than £12,000 a year into cash ISAs. The overall ISA allowance stays at £20,000, so the remaining £8,000 can go into stocks and shares, innovative finance or Lifetime ISAs. People aged 65 and over keep the full £20,000 for cash.

The new rules

£12,000 in cash: The most an under-65 can pay into cash ISAs in a tax year from 6 April 2027.
£20,000 overall: Unchanged. Anything above £12,000 has to go into a non-cash ISA.
Aged 65 and over: The cash limit stays at £20,000, with the entitlement running from the start of the tax year in which you turn 65.
Transfers into cash: Under-65s cannot transfer money from a stocks and shares or innovative finance ISA into a cash ISA.
A 22% charge on cash interest: Interest paid on cash held inside a stocks and shares or innovative finance ISA is charged at a flat 22%, the new basic rate for savings income. The ISA manager pays it to HMRC.
Money market funds: A stocks and shares ISA cannot be invested entirely in money market funds. Junior ISAs are outside this rule.

Where the rules come from

The change was announced at the Budget on 26 November 2025. It is made by the Individual Savings Account (Amendment) (No. 2) Regulations 2026, laid before Parliament on 14 September 2026, and comes into force on 6 April 2027.

HMRC's figures show that in 2022 to 2023, 78% of cash ISA savers under 65 paid in less than £12,000 and 22% paid in more.

The Lifetime ISA

The government has consulted on a First Time Buyer ISA to replace the Lifetime ISA for new savers. The consultation closed on 18 August 2026 and says the limits and bonus will be announced at a future fiscal event.

Until the new account is available a Lifetime ISA can still be opened, and existing holders can keep paying in under the current rules. Our Lifetime ISA answer covers the bonus and the withdrawal charge.

From 6 April 2027 an under-65 can put £12,000 a year into cash ISAs and the other £8,000 of the allowance into investments.

Where this fits

How much to hold in cash and how much to invest depends on when you will need the money.

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The advisers for this subject

Sunny Bharj

Independent Financial Adviser

Tony Springer

Independent Financial Adviser

Advising through Equity & General Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority. Check the firm on the FCA register under number 474163.