Cash ISA allowance cut to £12,000 from April 2027: what savers should know
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The government plans to reduce the cash ISA subscription limit for under-65s from £20,000 to £12,000 from 6 April 2027, while keeping the overall ISA wrapper at £20,000. Stocks & Shares ISA cash holdings may also face a new tax charge.
By Money Guide editorial team
Published:
Treasury proposals announced in the 2025 Budget would cap cash ISA subscriptions at £12,000 a year for savers aged 18–64 from 6 April 2027. The overall £20,000 ISA allowance remains — the difference could go into Stocks & Shares ISAs or other ISA types.
HMRC data show strong cash ISA inflows in spring 2026 as savers used allowances before the change. If you have not used your 2026/27 £20,000 allowance, there is still time before 5 April 2027 under current rules.
Separate plans would tax interest on uninvested cash held inside Stocks & Shares ISAs above a threshold from April 2027. That targets large cash balances sitting in investment wrappers, not normal investing behaviour.
Basic-rate taxpayers with modest savings may still prefer easy-access accounts within the Personal Savings Allowance. Above that, Cash ISAs remain tax-free until the rules change — see our best Cash ISA rates hub for product types, not personal recommendations.
Policy details can change before legislation passes. Check gov.uk and the Treasury consultation responses for confirmed dates and limits.