Cash ISA changes from April 2027: £12,000 limit explained

Correct as of 26 September 2026. The ISA and tax rules on this page were last checked against gov.uk on this date. Figures are for the 2026/27 tax year unless a different year is stated.

The statements on this page about HMRC's tax-free savings newsletter 23 and the anti-circumvention factsheet were read on gov.uk on 5 October 2026, which is later than the date above.

The rules on how much you can save in a cash ISA are changing. Regulations made on 10 September 2026 (SI 2026/1018, read on legislation.gov.uk on 6 October 2026) provide that from 6 April 2027, the start of the 2027/28 tax year, savers who are under 65 at the end of the tax year will be able to put no more than £12,000 a year into cash ISAs. The overall ISA allowance stays at £20,000, so the rest can still go into other types of ISA. Savers aged 65 and over keep a higher cash limit.

This guide explains what is changing, who is exempt, what stays the same, and how the new limit works in practice. The rules described here are made in law, not yet in force, to apply from 6 April 2027: they are in regulations made on 10 September 2026 (SI 2026/1018, read on legislation.gov.uk on 6 October 2026), and the details come from the regulations and the gov.uk pages listed at the end.

In brief

Overall ISA allowance: £20,000 a year, unchanged, and set to stay at that level until April 2031.
Cash ISA limit from 6 April 2027 (made in law): £12,000 a year if you are under 65; £20,000 from the start of the tax year in which you turn 65.
Transfers from a stocks and shares or Innovative Finance ISA to a cash ISA: from 6 April 2027, allowed if the ISA holder is 65 or over at the end of the tax year (SI 2026/1018, regulation 13, which inserts regulation 21(4ZA); made in law).
Interest on cash held inside stocks and shares or Innovative Finance ISAs: a flat rate charge (made in law; not for Junior ISAs) at the savings basic rate in force for the year; the factsheet gives 22%, from 6 April 2027.
In 2026/27: there is no separate cash limit, so you can put up to £20,000 into cash ISAs.

What is changing

Regulations made on 10 September 2026 (SI 2026/1018, read on legislation.gov.uk on 6 October 2026) provide that from 6 April 2027, savers who are under 65 at the end of the tax year will be able to pay up to £12,000 a year into cash ISAs, within the overall ISA allowance. From the start of the tax year in which they turn 65, savers will be able to pay up to £20,000 a year into cash ISAs.

The cash limit sits inside the overall allowance. It does not add to it. If you are under 65 and put the full £12,000 into cash ISAs in 2027/28, you could still pay up to £8,000 into other ISAs that year, such as a stocks and shares ISA.

ISA limits before and after 6 April 2027
	2026/27	From 6 April 2027 (2027/28)
Overall ISA allowance	£20,000	£20,000
Cash ISA limit, under 65	No separate limit (up to £20,000)	£12,000
Cash ISA limit, from the tax year you turn 65	No separate limit (up to £20,000)	£20,000
Lifetime ISA limit	£4,000	£4,000
Junior ISA limit (per child)	£9,000	£9,000

gov.uk describes the new figure as the cash ISA subscription limit for individuals. Like the overall allowance, it is a limit on what you pay in during the tax year, so it covers all the cash ISAs you pay into that year rather than each account separately.

Who is exempt: savers aged 65 and over

The higher cash limit of £20,000 applies from the start of the tax year in which you turn 65, not from your birthday. For example, if your 65th birthday falls at any point in the 2027/28 tax year, you can use the higher limit from 6 April 2027. Under SI 2026/1018, regulation 13, which inserts regulation 21(4ZA), transfers from a stocks and shares or Innovative Finance ISA to a cash ISA are allowed if the ISA holder is 65 or over at the end of the tax year.

Transfers into cash ISAs

Regulations made on 10 September 2026 (SI 2026/1018, regulation 13, which inserts regulation 21(4ZA), read on legislation.gov.uk on 6 October 2026) provide that, from 6 April 2027, transfers from a stocks and shares or Innovative Finance ISA to a cash ISA are allowed if the ISA holder is 65 or over at the end of the tax year. The regulations (regulation 13) set this out, and the government's factsheet on anti-circumvention rules for the 2027/28 ISA reforms describes it.

You can still move a cash ISA to another cash ISA provider by ISA transfer. Our guide to ISA transfers explains how transfers work.

Cash held inside stocks and shares ISAs

Regulations made on 10 September 2026 (SI 2026/1018, regulation 15, read on legislation.gov.uk on 6 October 2026) provide that, from 6 April 2027, the account manager (the firm that runs the ISA) will have to pay HMRC a flat rate charge on interest or alternative finance returns paid or credited on cash held in a stocks and shares or Innovative Finance ISA (other than a Junior ISA, regulation 4). The regulations say the charge is set at the savings basic rate in force for the year and regulation 22A gives no percentage. The anti-circumvention factsheet gives the rate as 22%; the pages read do not state whether the savings basic rate for that year equals 22%.

The regulations (SI 2026/1018, regulation 9, read on legislation.gov.uk on 6 October 2026) add money market funds to the qualifying investments for a stocks and shares ISA on condition that 100% of the value of the investments other than cash is not money market funds. Money market funds can therefore be held, but in a stocks and shares ISA they cannot make up the whole of the non-cash investments. A money market fund here is one authorised under Article 4 or Article 5 of Regulation 2017/1131 (regulation 3), and the condition does not apply to Junior ISAs (regulation 4). The factsheet describes the measure as "cash-like assets" and a "non-cash ISA", and HMRC newsletter 23 as stocks and shares ISAs; the provisions read use none of these phrases, and the pages read do not say what the rule means for other ISA types. If you hold cash or Money Market Funds inside a stocks and shares ISA, check with your provider how these rules will apply to your account.

What is not changing

The overall ISA allowance stays at £20,000 a year until April 2031.
The Lifetime ISA limit stays at £4,000 and the Junior ISA limit at £9,000, both until April 2031.
Interest, income and gains inside an ISA remain free of tax.
You can still pay into more than one ISA of the same type in a tax year, as you have been able to since 6 April 2024, as long as you stay within the limits.

Worked examples for 2027/28

Aged 40, wants to use the full allowance

Up to £12,000 can go into cash ISAs. The remaining £8,000 of the £20,000 allowance could go into a stocks and shares ISA, an Innovative Finance ISA or, if eligible, a Lifetime ISA (up to £4,000 a year, which counts towards the £20,000).

Turns 65 during 2027/28

Because the higher limit applies from the start of the tax year in which you turn 65, this saver can pay up to £20,000 into cash ISAs for the whole of 2027/28, and transfers from a stocks and shares or Innovative Finance ISA to a cash ISA are allowed for this saver, who is 65 at the end of the tax year (SI 2026/1018, regulation 13, which inserts regulation 21(4ZA)).

Under 65, with two cash ISAs

A saver paying into two cash ISAs in 2027/28 can split the £12,000 between them in any way, for example half in each, but cannot pay £12,000 into each.

What this means for your plans

The change affects how much new money under-65s can put into cash ISAs each year. It does not tell anyone what to do with their savings, and the right approach depends on your circumstances, including how long you are saving for and how much risk you can accept with investments. Some savers may choose to keep more in cash outside an ISA, where interest is taxed above the Personal Savings Allowance. Others may consider a stocks and shares ISA for longer-term money, accepting that its value can fall.

These tools apply the limit made in law to each tax year, so you can see how it affects a plan that runs past 6 April 2027:

Cash ISA Calculator: projections that leave out any cash above the limit.
ISA Contribution Split Planner: splitting your allowance between cash and stocks and shares.
ISA Allowance Checker: how much allowance, and how much cash allowance, you have left.
ISA vs Savings Account Calculator: the tax on interest from savings held outside an ISA.

For all the limits in one place, see ISA rules at a glance. If you want to know how many ISAs you can open and pay into, read How many ISAs can I have?

Sources

This article is general information based on gov.uk guidance, not financial advice. The rules described here are made in law but not yet in force and could change before they take effect; this guide read only the main provisions of SI 2026/1018 on legislation.gov.uk on 6 October 2026. If you are unsure what to do, consider speaking to a regulated financial adviser.

Get a short email before the tax year ends on 5 April and when the new one starts on 6 April.

We send up to four emails a year: three before the tax year ends (8 weeks, 3 weeks and 1 week before) and one on the first day of the new tax year. Each one states the tax-year dates and the ISA limits for that year, with a link to the ISA rules page. We send nothing else to this list.

General information only. Not financial advice.