Overview
- Chancellor Rachel Reeves has confirmed that from April 2027 the annual cash ISA contribution limit will fall from £20,000 to £12,000 for savers aged under 65 while those 65 and over will keep the £20,000 limit.
- HMRC has stated that interest on cash held within stocks and shares ISAs will face a tax charge from April 2027, and media reports say the rate being prepared is 22 percent though that rate has not been officially published.
- Reports say the Treasury plans to block transfers from stocks and shares and innovative finance ISAs into cash ISAs as an anti‑avoidance measure to stop savers moving large cash balances around to escape the new limit.
- Investment firms and platforms have warned that the rules apply only to new contributions from April 2027 and that the current implementation timetable leaves little time for firms to change systems and for the Treasury to publish technical guidance.
- The change is the first cut to the cash ISA allowance since 2017 and is expected to push more people into taxable savings interest and into investment ISAs; regulators, industry and consumer groups will now be watching for detailed HMRC rules and transfer mechanics.