Cash ISA Limit Falls to £12,000 for Under-65s From April 2027
From 6th April 2027, the annual Cash ISA limit will fall from £20,000 to £12,000 for most people under 65. The overall ISA allowance will stay at £20,000, and people who reach age 65 during the tax year will qualify for the higher Cash ISA limit under the new age rules. The changes apply across the UK.
How the Cash ISA limit is changing
From 6th April 2027, most people under 65 will be able to subscribe up to £12,000 a tax year to Cash ISAs. The limit is about new money paid into Cash ISAs during the tax year. It is not a cap on the amount you can already hold in an account, and it does not mean existing balances will be reduced.
The current rules continue to apply for the 2026/27 tax year, which ends on 5th April 2027. The new rules are set out in the Individual Savings Account (Amendment) (No. 2) Regulations 2026, which come into force on 6th April 2027.
The overall ISA allowance stays at £20,000
The annual ISA allowance will remain £20,000 across eligible ISA types. From April 2027, the £12,000 Cash ISA limit for most under-65s will sit within that overall allowance, rather than replacing it. The remaining £8,000 may potentially be used for other eligible ISA subscriptions, subject to the rules for those accounts and your own circumstances. You do not have to invest in another type of ISA if it is not right for you.
How the £20,000 allowance could be split
Cash ISA limit for most under-65s
£12,000
Potential allowance left
£8,000
Overall ISA allowance
£20,000
This is an illustration of the limits, not a recommendation to invest. The remaining allowance can only be used through other eligible ISA types in line with their rules.
What happens if you already have more than £12,000 in a Cash ISA?
You can keep your existing Cash ISA savings. The new limit applies to new subscriptions during a tax year, not the total balance you have built up over time. You do not need to withdraw money or reduce an existing balance simply because it is above £12,000.
The lower subscription limit does not itself make interest on your existing Cash ISA savings taxable. The usual ISA rules continue to apply to qualifying money already held in the account.
Who can still pay £20,000 into a Cash ISA?
People who qualify under the new age rule will retain the £20,000 annual Cash ISA limit. The test is based on the tax year, not simply your age on the day you open an account: the higher limit applies from the start of the tax year in which you turn 65. The £12,000 limit applies where you are 64 or younger at the end of that tax year.
How ISA transfers will change
Paying new money into an ISA and transferring money from another ISA are different things. From 6th April 2027, transfers from a Stocks and Shares ISA or an Innovative Finance ISA into a Cash ISA will not be permitted for people who are 64 or younger at the end of the tax year. The restriction is lifted from the start of the tax year in which you turn 65. Transfers from a Cash ISA into a non-Cash ISA will remain possible.
If you are considering moving money between ISAs, speak to your provider and use its formal transfer process. Do not withdraw the money yourself first unless your provider confirms that is the correct process for your circumstances, as withdrawing can affect the tax-free status of the money.
What the new rules mean for cash held in other ISAs
The Cash ISA limit reduction is accompanied by rules intended to stop people using other ISA types simply to get around the lower limit. From 6th April 2027, a flat 22% charge will apply to interest or alternative finance returns paid on cash deposits held inside Stocks and Shares ISAs and Innovative Finance ISAs. The ISA provider will pay this charge to HMRC, so individuals do not need to declare this ISA interest to HMRC themselves. The charge applies to returns from cash deposits, not to ordinary investment returns across the whole account.
From April 2027, Money Market Funds will be the investments specifically treated as cash-like for these rules, and ISA providers will have to report their value to HMRC. A Stocks and Shares ISA or Innovative Finance ISA made up entirely of Money Market Funds will not qualify under the new rules, but a mixed portfolio can still include some Money Market Fund holdings. Other common investments, including individual shares, funds other than Money Market Funds, investment trusts, exchange-traded funds and government or corporate bonds, are not treated as cash-like assets under this measure.
Will the change affect you?
The change is most likely to matter if you are under 65 under the new tax-year age test and usually pay more than £12,000 a year into Cash ISAs. HMRC estimated that around 22% of Cash ISA subscribers under 65 paid in more than £12,000 in 2022/23. If you save less than that in cash each year, the new limit may not change how much you can put into a Cash ISA.
You do not need to make a decision about other savings or investments just because the Cash ISA limit is changing. Compare the risks, access to your money, fees and tax rules before choosing another account or investment.
What to check before April 2027
- How much you normally pay into Cash ISAs during each tax year.
- Whether the age rule means you qualify for the £20,000 Cash ISA limit.
- Whether you are planning a new subscription or an ISA transfer, as different rules apply.
- Whether the remaining part of your overall ISA allowance is suitable for another eligible ISA type.
- The latest guidance from HMRC and your ISA provider before making a transfer or changing your savings arrangements.
Cash ISA limit 2027: frequently asked questions
When does the Cash ISA limit change?
The new limit starts on 6th April 2027, at the beginning of the 2027/28 tax year. The current rules apply until 5th April 2027.
Will the overall ISA allowance fall to £12,000?
No. The overall annual ISA allowance remains £20,000. The £12,000 limit applies to Cash ISA subscriptions for most people under 65.
What if I already have more than £12,000 in a Cash ISA?
You can keep the existing balance. The new limit applies to new subscriptions, not the total amount already saved.
Can people aged 65 or over still pay £20,000 into a Cash ISA?
Yes. The higher limit applies from the start of the tax year in which you turn 65, under the new age rules.
Can I transfer a Stocks and Shares ISA into a Cash ISA?
From 6th April 2027, transfers from Stocks and Shares ISAs and Innovative Finance ISAs into Cash ISAs will not be permitted for people who are 64 or younger at the end of the tax year. The restriction is lifted from the start of the tax year in which you turn 65. Transfers from Cash ISAs into non-Cash ISAs remain possible.
Will interest on my existing Cash ISA become taxable?
No. The lower annual subscription limit does not itself make interest on existing Cash ISA savings taxable. Separate rules apply to cash held within some non-Cash ISA accounts.
