Cash ISA changes April 2027: what savers need to know
Published: 23 October 2026
With not long to go until the 2027/2028 tax year begins, now’s a good time to understand how cash ISA reforms could affect your savings plans.
Before we dive in, take a look at this short video explaining the key need-to-knows:
Ready? OK. You might be slowly building an emergency fund, saving towards a future goal or trying to max out your ISA allowance. Whatever you’re saving for, a bit of prep can help you make some informed choices. After all, you don't pay tax on the interest earned inside a cash ISA.
Is the ISA allowance changing?
The overall ISA allowance is staying at £20,000. But what is changing is how much of that savers under 65 can put into cash ISAs. From the 2027/2028 tax year the cash ISA limit for under-65s will fall from £20,000 to £12,000 a year.
If you want to use your full £20,000, any remaining allowance – so up to £8,000 – can still be used in other eligible ISAs, such as stocks and shares ISAs and innovative finance ISAs.
When does the ISA allowance change?
The new rules take effect from 6 April 2027 for the start of the 2027/2028 tax year. Until then, the current rules apply and you can still pay up to £20,000 into cash ISAs in the 2026/2027 tax year, which ends on 5 April 2027.
How will the revised allowance work in practice?
Think of your £20,000 allowance as a pot that can be split across ISA types. Under the new reforms, if you’re under 65, no more than £12,000 of it can go into cash ISAs.
For example: If you’re under 65, you could put £12,000 in a cash ISA and £8,000 in a stocks and shares ISA. You can use as much of your allowance within the limits as you wish.
What happens to money already held in a cash ISA?
The changes apply to new payments in a tax year, not savings you’ve already built up. Money already held in a cash ISA isn’t affected and keeps its tax-free status. The new limit doesn’t mean you have to withdraw or move existing balances.
Does a cash ISA transfer count towards your allowance?
No. Transferring existing ISA savings from one provider to another doesn’t use up your current-year allowance. But you must complete the transfer through your new provider rather than withdrawing the money yourself. Always use the official transfer process.
What happens if you go over your ISA allowance?
If it’s within the current tax year and you've gone over the allowance with a provider, they should contact you to resolve the issue and return any additional funds. For any previous tax years, HMRC will contact you directly.
Keep track of what you pay in across all your ISAs as it’s your responsibility to stay within the allowance. Each provider won't be aware of what has been saved elsewhere. If you’re unsure, check what you've saved overall in the tax year with all providers.
When does your ISA allowance reset?
Your allowance resets every year on April 6, the first day of the new tax year. Unused allowances can’t be carried forward, so it’s use it or lose it!
Making the most of your allowance before the changes
- Consider using your 2026/2027 allowance in full if you can. Up to £20,000 can still go into cash ISAs until 5 April 2027.
- Think about what comes next. If you usually save £20,000 in a cash ISA each year, consider how you might want to use your remaining funds. Use our savings calculator to find out.
- Seek help if needed. For investment decisions, consider speaking to a regulated financial adviser.
What is the ISA allowance for over 65s for 2027/2028?
Savers aged 65 and over on 6 April 2027 will still be able to save up to £20,000 annually in a cash ISA. They aren’t affected by the changes to the cash ISA limit for under-65s.
What if I turn 65 during a tax year when the changes come in?
If you turn 65 during a tax year when the changes have come into effect, you’ll be treated as being 65 for that whole tax year. This means you can deposit up to £20,000 into a cash ISA at any point during the year.
The bottom line
The changes are still a few months away, so you’ve got time to consider your options. Understanding the new split between cash and other ISAs can help you build a savings strategy that suits your goals.
This article is not advice, and you should seek independent financial or legal advice if needed.
