Short answer
The overall ISA allowance is £20,000 for the 2026/27 tax year, which you can split across cash, stocks and shares, innovative finance and Lifetime ISAs as you choose. From 6 April 2027, the amount of that £20,000 you can put into a cash ISA is being reduced to £12,000 if you're under 65; if you're 65 or over, your cash ISA limit stays at £20,000.
The ISA allowance today
For the current tax year, the total you can pay into ISAs is £20,000, which can be split across different types of ISA (cash, stocks and shares, innovative finance, Lifetime ISA) in any combination you like, as long as you don't exceed £20,000 in total and the Lifetime ISA sub-limit of £4,000.
What's changing for cash ISAs from April 2027
HMRC has confirmed that from 6 April 2027, the annual cash ISA subscription limit reduces to £12,000 for savers under 65. The overall £20,000 ISA allowance is unchanged — you'd simply need to put at least £8,000 of it into stocks and shares or innovative finance ISAs rather than cash.[2]
If you're 65 or over, your cash ISA limit stays at £20,000 — no change for you.
New anti-circumvention rules are also being introduced, including a flat 22% charge on interest earned on cash held inside a stocks and shares or innovative finance ISA, and restrictions on transferring money from those ISAs into a cash ISA. These are designed to stop people parking cash in a non-cash ISA to sidestep the new cash limit.
Why the government says it's doing this
The stated policy objective is to encourage more people to invest rather than hold large cash balances, on the basis that, over the long term, investing has historically produced better returns than cash savings — though investments can fall as well as rise in value and past performance is not a guide to the future.
What's confirmed and what's proposed
Confirmed and already law: from 6 April 2027 the cash ISA subscription limit falls to £12,000 for savers under 65, set out in the Individual Savings Account (Amendment) (No. 2) Regulations 2026.[2]
Confirmed and already law: savers aged 65 and over keep a £20,000 cash ISA limit, and the overall £20,000 total ISA allowance is unchanged.
Confirmed and already law: the anti-circumvention rules — a flat 22% charge on interest earned on cash held in a stocks and shares or innovative finance ISA, and restrictions on transfers from those ISAs into a cash ISA — also take effect on 6 April 2027.
Nothing about the ISA allowance itself has been announced for the 28 October 2026 Budget beyond what's described above — treat any further reported changes as speculation until GOV.UK confirms them.
What to think about before April 2027
If you're under 65 and usually save more than £12,000 a year in a cash ISA, think about whether some of that could instead go into a stocks and shares ISA — but only once you understand the risks, have an emergency fund, and have a time horizon of several years.
If you're not comfortable with investment risk, you can still use ordinary savings accounts and your Personal Savings Allowance alongside a £12,000 cash ISA — just be aware interest outside an ISA may be taxable.
This is general education. Whether to move money from cash to investments depends on your own circumstances, risk tolerance and timeframe — speak to an FCA-regulated adviser for a personal recommendation, or use MoneyHelper's free guidance tools.
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Questions
Questions people also ask
What is the ISA allowance for 2026/27?
£20,000 in total, which you can spread across cash, stocks and shares, innovative finance and Lifetime ISAs (subject to the £4,000 Lifetime ISA sub-limit).
Is the cash ISA allowance being cut?
From 6 April 2027, the cash ISA limit reduces to £12,000 for savers under 65. It stays at £20,000 for savers aged 65 and over.
Does the overall ISA allowance change in April 2027?
No. The total ISA allowance stays £20,000 — only the amount of it you can hold in cash (if you're under 65) is reduced.
Why is the cash ISA limit being reduced?
The government says it wants to encourage more retail investment, as it believes this gives savers better long-term returns than cash — though investments carry risk and can fall in value.
Should I move my cash ISA savings into investments now?
That depends on your own circumstances, goals and comfort with risk. This is general education, not a personal recommendation — speak to an FCA-regulated adviser or use MoneyHelper's free tools before deciding.