TL;DR
From 6 April 2027 the government intends to set a £12,000 annual Cash ISA limit for savers under 65. The overall £20,000 ISA allowance is unchanged, and savers aged 65 and over keep the £20,000 Cash ISA limit. For 2026/27 the full £20,000 can still go into a Cash ISA.
Last reviewed: 14 May 2026
Key facts
- Cash ISA limit for under-65s: £12,000 a year from April 2027 (intended).
- Savers aged 65 and over: £20,000 Cash ISA limit retained.
- Overall ISA allowance: stays at £20,000 a year.
- 2026/27: the full £20,000 can still be paid into a Cash ISA.
- Stocks and Shares ISAs are not subject to the new sub-limit.
What the change does
An ISA lets savers earn interest or investment returns free of Income Tax. The total amount that can be paid into ISAs in a tax year is £20,000. From 6 April 2027 the government intends to cap the share of that allowance that can go specifically into a Cash ISA at £12,000 a year for savers under 65. The remaining allowance can still be used, but in a Stocks and Shares ISA or other qualifying ISA type.
Who is affected and who is not
Savers aged 65 and over keep the ability to place the full £20,000 into a Cash ISA. The sub-limit applies to those under 65. The total £20,000 allowance itself does not change for anyone.
Why this tax year matters
Because the sub-limit is intended to start in April 2027, the 2026/27 tax year still allows the full £20,000 to be paid into a Cash ISA. Savers who specifically want cash holdings inside an ISA wrapper have this window before the lower limit is expected to apply.
The thinking behind the change
The policy is part of a wider government aim to encourage more long-term investing rather than holding large balances in cash. Cash ISAs remain available and useful for short-term savings and emergency funds, but the structure nudges larger sums towards investment ISAs.
What savers can review
People who hold significant cash savings may want to understand how much of their ISA allowance currently sits in cash, and how that compares with the intended £12,000 figure. The decision between cash and investments depends on time horizon and attitude to risk, not on the wrapper alone.
How the ISA rules fit the wider picture
The Cash ISA change runs alongside the dividend rate rise from April 2026 and the Personal Allowance allocation change from April 2027. Tax-efficient wrappers become more valuable as rates on income outside them rise, which is part of why the ISA structure is under review.
Related guides
Frequently asked questions
What is the new Cash ISA limit?
From 6 April 2027 the government intends to set a £12,000 annual Cash ISA limit for savers under 65.
Is the overall ISA allowance changing?
No. The total ISA allowance stays at £20,000 a year. Only the share that can go into a Cash ISA is intended to be capped.
Does the limit apply to everyone?
No. Savers aged 65 and over are intended to keep the £20,000 Cash ISA limit. The £12,000 figure applies to those under 65.
Can I still use a full Cash ISA this year?
Yes. For the 2026/27 tax year the full £20,000 can still be paid into a Cash ISA, because the lower limit is intended to start in April 2027.
What happens to the rest of my allowance?
Any allowance above the Cash ISA sub-limit can still be used, for example in a Stocks and Shares ISA, up to the £20,000 total.
