Overview
- From April 6, 2027, the cash ISA allowance for people under 65 will fall from £20,000 to £12,000 while the overall £20,000 ISA limit is to be retained.
- Multiple outlets report the Treasury is preparing a proposed 22% levy on interest earned from cash held inside stocks-and-shares ISAs, a measure that is reported but not yet fully detailed or legislated.
- Banks and savers have already reacted, with one-year fixed cash ISA rates rising and Investec forecasting cash ISA inflows could jump by as much as 20% ahead of the change.
- Industry groups warn the reforms will add complexity for providers and HMRC, create enforcement challenges and could be sidestepped by workarounds such as the reported '1p loophole'; proposals to protect people aged 65 and over are being discussed.
- What to watch next: final legislation and detailed rules from the Treasury and HMRC, the design of anti-avoidance measures, and how changes will affect retirees who hold cash near retirement and everyday savers choosing between cash and investment ISAs.