Overview
- HMRC says it will introduce rules to stop people bypassing the lower cash ISA cap by parking uninvested cash inside stocks and shares ISAs, with details to be consulted on and published before implementation.
- Reporting describes a proposed 20% charge on interest earned on cash held within investment ISAs, which at current rates would equate to about £81 on £10,000, £162 on £20,000 and £243 on £30,000.
- Chancellor Rachel Reeves has confirmed that people aged 65 and over will retain the £20,000 cash ISA allowance, while those under 65 will be limited to £12,000 from April 2027.
- Industry figures warn the move could penalise legitimate short-term cash holdings within ISAs and suggest alternatives such as a time-limited grace period to deploy funds.
- Bank of England data show £5.1 billion flowed into cash ISAs ahead of the Autumn Budget as savers responded to expectations of rule changes.