From 6 April 2027, the amount you can pay into a Cash ISA each tax year is changing for most savers. The government has confirmed that the annual Cash ISA limit for under-65s will fall from £20,000 to £12,000, while the overall £20,000 ISA allowance stays the same. If you’re wondering what this actually means for your savings, who it affects, and what you should be doing before the new tax year starts, this guide breaks it all down.
★ Quick Summary
What's actually changing with the Cash ISA limit
The headline change is straightforward, but it’s easy to misread it. From 6 April 2027, if you’re under 65, you’ll only be able to pay up to £12,000 into a Cash ISA in a single tax year. That’s a £8,000 reduction on the current £20,000 limit.
The government says the aim is to encourage more long-term investing, while limiting the extent to which Stocks and Shares ISAs can be used purely as a place to shelter cash. What doesn’t change is your overall ISA allowance. The total amount you can shelter across all your ISAs each year remains £20,000. It’s worth being clear that this £20,000 is an annual subscription limit, not a cap on how much your ISA can be worth. There’s no limit on how large your ISA savings can grow over your lifetime once the money is inside. The difference from April 2027 is how that £20,000 annual allowance can be split. Right now, you could put the entire £20,000 into cash if you wanted to. If you wish to use your full £20,000 ISA allowance from April 2027 onwards, the remaining £8,000 can only be subscribed to a Stocks and Shares ISA, a Lifetime ISA, or an Innovative Finance ISA.
In practice, this means:
– You can still put up to £12,000 into a Cash ISA and leave the rest of your allowance unused, if that suits you
– Or you can split contributions, for example £12,000 in cash and £8,000 in a Stocks and Shares ISA
– Or you can put the full £8,000 “extra” allowance into investments if you’re comfortable taking on some investment risk.
This change was confirmed as part of the Autumn Budget 2025, and the technical detail was set out by HMRC in a factsheet published on 23 June 2026. It’s a done deal rather than a proposal still open to consultation, so this is confirmed policy rather than something that might still shift.
Watch: The Cash ISA changes explained in 13 minutes
Who's affected, and who's exempt
The lower £12,000 limit applies to anyone under 65. If you’re 65 or over, you’re exempt: you keep the full £20,000 Cash ISA allowance, and none of this affects you directly.
The government has clarified that this exemption starts from the tax year in which you turn 65, not on your actual birthday. So if you turn 65 at any point during the 2027/28 tax year, you’ll have the full £20,000 Cash ISA allowance available for that entire year, even if your birthday falls partway through it. In other words, eligibility is determined by your age during the relevant tax year, rather than requiring you to wait until your actual birthday before using the higher allowance.
One thing worth flagging honestly: the government has said this over-65 exemption will stand “at least initially,” but hasn’t confirmed whether or when it might eventually be phased out. If you’re approaching 65 and cash savings are a priority for you, it’s worth keeping an eye on future Budget announcements rather than assuming this protection is permanent.
If you’re under 65 and you mostly rely on cash savings, whether that’s for an emergency fund, a house deposit, or simply because you’re cautious about investment risk, this is the change that affects you most directly.
The anti-circumvention rules most articles miss
Alongside the headline limit change, HMRC introduced two additional rules to prevent people from working around the new cap. These matter if you’re thinking about using a Stocks and Shares ISA simply as a place to park cash.
The transfer ban. From April 2027, you won’t be able to transfer money from a Stocks and Shares ISA or Innovative Finance ISA into a Cash ISA if you’re under 65. Transfers between other ISA types will still be allowed; this restriction specifically targets moving money into cash.
The 22% charge on uninvested cash. If you hold cash inside a Stocks and Shares ISA, for example while deciding what to invest in, any interest that cash earns will be charged at a flat 22% from 6 April 2027. This is aimed at savers who might otherwise use the “cash” part of an investment ISA as a workaround for the lower Cash ISA limit. It’s worth being precise about scope here: the charge applies only to interest earned on uninvested cash. It does not apply to dividends, capital gains, or investment returns generated by assets actually held within the ISA.
Want the technical detail behind the 22% charge?
Our follow-up video covers the now-confirmed rules on the 22% charge, how money market funds are treated, and what’s known so far about the new First Time Buyer ISA.
Action Steps
Frequently asked questions
Q: Does the Cash ISA limit change affect money I've already saved?
No. The new £12,000 limit only applies to new contributions made from 6 April 2027 onwards. Any money already sitting in your Cash ISA from this year or previous years stays protected and continues earning tax-free interest as normal.
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Q: Can I still put £20,000 into a Cash ISA this year?
Yes. The current 2026/27 tax year, which runs until 5 April 2027, is unaffected. You can still contribute up to the full £20,000 into a Cash ISA if that's the right choice for your circumstances. The lower £12,000 limit only starts from 6 April 2027.
Q: WWhat happens to the rest of my £20,000 allowance if I only use £12,000 in cash?
It's yours to use or not use. From April 2027, under-65s can put up to £12,000 into a Cash ISA and the remaining £8,000 of the £20,000 total allowance into a Stocks and Shares ISA, Innovative Finance ISA, or Lifetime ISA. You're not obliged to use the full £20,000 at all, and there's no penalty for leaving allowance unused.
Q: Will the over-65s exemption last forever?
It's not guaranteed indefinitely. The government has said the £20,000 Cash ISA allowance for those 65 and over will remain "at least initially," but hasn't confirmed how long this will last or whether it may be reviewed in future. If you're relying on this exemption long-term, it's worth checking for updates around future Budget announcements.
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Q: Can I still transfer an old Cash ISA?
Yes. Existing Cash ISA transfers remain possible. The new rules affect annual subscriptions and certain transfers from investment ISAs into Cash ISAs for under-65s, rather than preventing ordinary Cash ISA-to-Cash ISA transfers.
Q: Do Junior ISAs have a lower limit too?
No. The Junior ISA allowance is unaffected by these changes and remains £9,000 per child per tax year.
Key takeaways
- From 6 April 2027, under-65s can put a maximum of £12,000 into a Cash ISA each tax year, down from £20,000.
- The overall £20,000 ISA allowance is unchanged; the remaining £8,000 must go into a Stocks and Shares, Innovative Finance, or Lifetime ISA to be used.
- Savers 65 and over keep the full £20,000 Cash ISA allowance, at least for now.
- Existing Cash ISA savings are not affected; only new contributions from April 2027 fall under the new limit.
- Transfers from investment ISAs into Cash ISAs will be banned for under-65s, and uninvested cash in a Stocks and Shares ISA will be charged 22% on interest from April 2027.
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