Is the ISA allowance changing?
Published: 26 November 2025
Is the ISA allowance changing?
The overall £20,000 Individual Savings Account (ISA) annual allowance isn't changing, but the limit for how much of that allowance can be saved in a cash ISA will reduce to £12,000 from the 2027 – 2028 tax year for anyone aged younger than 65. The change was confirmed in the Government’s Budget announcement on 26 November 2025. Over 65s will be exempt from the change.
The move to limit cash ISA savings at £12,000 from the 2027 tax year follows the government looking to encourage savers to put more cash into investment products rather than cash ISAs, with the aim to stimulate investment in UK companies. Some financial firms have supported the move, arguing that cash products could provide savers with poorer returns over the longer term compared to those linked to investments.
When will the cash ISA allowance change?
As announced in the Budget, the move to cap annual cash ISA savings at £12,000 will come in on 6 April 2027, the start of the 2027-28 tax year. However, this won't apply to those over 65, where the limit will remain the same at £20,000.
How does an ISA allowance work?
Under the reforms to the cash ISA announced in the Budget, the maximum amount of cash under-65s can put into a cash ISA will be £12,000 from the 2027-28 tax year, with the overall ISA allowance remaining at £20,000.
What's the difference between a cash ISA and a stocks and shares ISA?
Money in a cash ISA earns interest at a fixed or variable rate set by the provider, such as us and other building societies.
Money in a stocks and shares ISA is typically invested in assets like company shares, bonds, or funds. Returns can come from dividends, interest, or growth in value, but your capital is at risk and its value can go up or down.
Other ISA types, such as Lifetime ISAs and Innovative Finance ISAs, have different features and rules.
Our range of cash ISAs
Learn more about our latest range of fixed and variable rate cash ISAs.
