Overview
- The government has confirmed that from April 2027 the annual cash ISA allowance for people under 65 will fall from £20,000 to £12,000 while the overall £20,000 ISA limit will be retained.
- Press reports say Treasury plans a 22% charge on interest from cash held inside stocks-and-shares ISAs from April 2027 but the exact levy mechanics have not been formally confirmed by HMRC or legislated.
- Officials are drawing up anti-circumvention rules that are expected to bar some transfers from stocks-and-shares and innovative finance ISAs into cash ISAs and to treat cash-like products such as money market funds as in scope.
- The investment industry warns the April 2027 timetable is tight because platforms must change systems and products, and analysts have flagged possible loopholes such as a reported '1p' token-equity workaround that remain unresolved.
- The package echoes the pre-2014 distinction between cash and stocks-and-shares returns and links to planned rises in savings tax rates for 2027, a shift the Treasury argues will encourage more household investment in equities.