Cash ISA limit: £12,000 from April 2027

What is changing to the Cash ISA limit?

From 6 April 2027, you can put at most £12,000 a year into a Cash ISA, if you are 64 or under at the end of that tax year. Until then, the whole £20,000 ISA allowance can go into cash if that is what you want to do.

The £8,000 that no longer fits in cash does not vanish. If you want to keep saving £20,000 a year in total from 2027/28 onward, the remaining £8,000 has to go into a Stocks and Shares ISA, an Innovative Finance ISA, or a Lifetime ISA instead. And if you save less than £12,000 a year in cash already, none of this changes anything for you.

The 2027 Cash ISA change, at a glance

Cash ISA limit from 6 April 2027 (under 65)

£12,000

Down from £20,000

Overall ISA allowance

£20,000

Unchanged

Age for the full £20,000 cash limit

65 or over

Tested at the end of the tax year

Charge on cash inside a Stocks and Shares ISA

22%

All ages, from 6 April 2027

2026/27 From April 2027

Cash ISAs

£20,000 £12,000

Invested

£8,000

From 6 April 2027, under-65s can put up to £12,000 of their £20,000 allowance into Cash ISAs. The other £8,000 can only go into Stocks and Shares or other non-cash ISAs.

Until 5 April 2027, all of it can go into cash. 65 or over by 5 April? You keep the full £20,000 for cash.

189 days to go

What is not changing?

The overall ISA allowance stays at £20,000 a year. That figure has not moved since 2017/18, and the 2027 change does not touch it. What changes is only how much of that £20,000 is allowed to sit in cash.

Money you have already saved is not affected either. HMRC describes the £12,000 figure as a subscription limit, meaning it limits new money paid in during a tax year, not the total balance you hold. A Cash ISA worth £150,000, built up over fifteen years of saving, stays exactly as it is. You simply cannot add more than £12,000 of new money to it, or to any combination of Cash ISAs, in a single tax year from 2027/28 onward, unless you are 65 or over.

Ordinary transfers between Cash ISA providers look unaffected too, on the published wording. The block HMRC has announced applies specifically to transfers from a Stocks and Shares or Innovative Finance ISA into a Cash ISA. Moving an existing Cash ISA balance to a different bank for a better rate, including money saved in previous tax years, is not mentioned as restricted in the anti-circumvention factsheet or Newsletter 22. Treat that as the current reading of what has been published rather than a guarantee: the final regulations had not been laid before Parliament as of this check, so it is worth confirming again closer to April 2027.

Who does the £12,000 limit affect?

Your age at the end of the tax year decides which limit applies to you, not your age today and not your age on 6 April.

• If you are 64 or under on 5 April at the end of the relevant tax year, your Cash ISA limit is £12,000 for that year.
• If you are 65 or over on 5 April at the end of the relevant tax year, meaning your 65th birthday falls anywhere in that tax year, you keep the full £20,000 Cash ISA limit for the whole of it, backdated to 6 April.

That second point catches people out: you do not need to already be 65 at the start of the tax year to get the higher limit for the whole year. Turning 65 in the middle of it, or even on 5 April itself, is enough. For the exact mechanics and the edge cases, see the Cash ISA limit for over 65s.

What about cash held inside a Stocks and Shares ISA?

The £12,000 limit only controls money paid into a Cash ISA directly. Without a further rule, someone could still keep large cash balances inside a Stocks and Shares ISA or Innovative Finance ISA instead, and get the same tax-free result as before. HMRC’s anti-circumvention package closes that gap in three ways, all from 6 April 2027:

• A 22% flat-rate charge applies to interest, or the equivalent alternative finance return, paid on cash held inside a Stocks and Shares or Innovative Finance ISA. This applies at every age, including 65 and over.
• Cash-like holdings inside a non-cash ISA are limited to money market funds, and only as a partial allocation. A non-cash ISA can no longer be 100% cash-like.
• Transfers from a Stocks and Shares or Innovative Finance ISA into a Cash ISA are blocked for anyone who is 64 or under at the end of the tax year. Moving money the other way, from cash into investments, is not affected.

None of this touches money actually invested in funds, shares or bonds inside a Stocks and Shares ISA. It targets cash and cash-like holdings specifically. For the detail on the charge, see cash inside a Stocks and Shares ISA, and for the transfer rules, see ISA transfers after April 2027.

Why this makes ISAs more important

Savings income tax rates are rising by 2 percentage points from 6 April 2027: from 20% to 22% for basic rate taxpayers, 40% to 42% for higher rate taxpayers, and 45% to 47% for additional rate taxpayers. The Personal Savings Allowance, the amount of interest you can earn tax-free outside an ISA, is not changing: £1,000 for basic rate taxpayers, £500 for higher rate, and £0 for additional rate. Interest inside an ISA stays completely tax-free regardless of these rates.

Put those two things together, a smaller tax-free Cash ISA allowance alongside higher tax on interest held outside one, and it is clear why using whatever Cash ISA allowance you do have will matter more from 2027/28 than it did before. Tax treatment depends on your circumstances and may change.

Three examples

Priya is 42 and has saved the full £20,000 a year into a Cash ISA for the last few years. From 2027/28, she is 64 or under at the end of the tax year, so only £12,000 of that can go into cash. If she wants to keep saving £20,000 a year in ISAs overall, the other £8,000 has to go into a Stocks and Shares ISA, an Innovative Finance ISA, or a Lifetime ISA, or she saves less in ISAs than before.

Tom is 35 and saves £5,000 a year into a Cash ISA. He is not affected at all. £5,000 is comfortably under the new £12,000 cash limit, so 2027/28 changes nothing for him.

Margaret turns 65 in November 2027, partway through the 2027/28 tax year. Because her 65th birthday falls within that tax year, she keeps the full £20,000 Cash ISA limit for the whole of 2027/28, backdated to 6 April 2027, not only from the month she actually turns 65.

Key dates

• 28 October 2026: Autumn Budget 2026. The £12,000 limit was announced at the Autumn Budget 2025 and set out in more detail in June 2026, but this Budget and the final regulations, expected in autumn 2026, could still adjust the detail.
• 5 April 2027: the last day of the 2026/27 tax year, and the last day the £20,000 Cash ISA limit applies to everyone regardless of age.
• 6 April 2027: the £12,000 Cash ISA limit, the 22% charge on cash inside non-cash ISAs, and the transfer block all start.

Things to consider before 5 April 2027

These are options to weigh up, not a recommendation. What suits you depends on how much you save, your age, and what you would otherwise do with the money.

• Whether you have room left in this year’s £20,000 allowance, and whether using more of it before 5 April 2027 makes sense for you.
• Whether a fixed-rate or an easy-access Cash ISA suits your plans better, since locking in a rate now carries different trade-offs from staying flexible. See our Cash ISA rate tables for both.
• Whether you are 65 or over at the end of the relevant tax year, in which case the £12,000 cap will not apply to you anyway.
• Whether Stocks and Shares, innovative finance or a Lifetime ISA fit your wider savings plan, given more of your allowance may need to go there from 2027/28.

For a fuller look at this specific question, see should you fill your Cash ISA before April 2027.