Overview
- Under the confirmed rules, people under 65 will be limited to £12,000 a year in Cash ISAs while those aged 65 and over keep the full £20,000 allowance.
- HMRC will apply a flat 22% charge to interest and alternative finance returns on cash held inside non‑cash ISAs such as stocks & shares ISAs, with returns from Money Market Funds exempted.
- Transfers from non‑cash ISAs into Cash ISAs will be blocked for under‑65s but moving cash ISAs into non‑cash ISAs will still be allowed and the transfer ban is lifted in the tax year you turn 65.
- The rules are set to take effect in the 2027–28 tax year starting on April 6, 2027, and advisers say the announcement has already driven a short‑term rush of deposits into Cash ISAs while the current £20,000 limit still applies.
- Industry figures and some MPs warn the changes add complexity, could change how providers pay interest, and may produce unintended outcomes such as savers moving money outside ISAs or favouring money‑market solutions.