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last mo.

UK To Cap Cash ISA Contributions at £12,000 From 2027, Keeping £20,000 Overall Allowance

Over-65s retain the full cash allowance under a policy that steers saving toward investment with rules to block cash-like workarounds.

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Overview

  • The cut takes effect in April 2027, with most adults limited to £12,000 in cash ISA subscriptions each tax year.
  • The overall ISA limit remains £20,000, with Chancellor Rachel Reeves framing the change as a nudge toward investing.
  • People aged 65 and over keep the £20,000 cash ISA allowance under the exemption announced in the Budget.
  • Anti-avoidance steps will levy interest treated as cash within stocks and shares ISAs and assess for cash-like holdings to prevent circumvention.
  • UK Finance reports £207 billion in cash ISAs and £295 billion in notice accounts at end-September as households build precautionary buffers, while Murphy Wealth estimates a split cash-and-investment approach could add about £300,000 over 20 years versus cash only.