Cash ISA Rules 2027: What Changes from April?

Last updated: 12 September 2026

From 6 April 2027, the government has decided to set the annual Cash ISA subscription limit at £12,000 for people under 65, while keeping the overall ISA allowance at £20,000. HMRC has published the intended anti-circumvention package, but the detailed amending regulations are still moving through the final legislative process.

What the current 2026/27 rules say

For the 2026/27 tax year, adults can subscribe up to £20,000 across their ISAs. The allowance can be split across eligible ISA types, subject to each product’s own rules.

Adults can generally subscribe to more than one ISA of the same type during a tax year, provided total subscriptions stay within the applicable limits. Lifetime ISAs are different: the annual Lifetime ISA limit is £4,000 and counts towards the overall £20,000 ISA allowance.

What is intended to change from 6 April 2027

The government describes this as the intended package for April 2027. HMRC has published draft legislation, but the final amending regulations have not yet been reflected in the main GOV.UK consumer ISA guidance.

The £12,000 Cash ISA sub-limit

For someone under 65, the planned £12,000 limit applies to new Cash ISA subscriptions across all Cash ISAs combined. It is not a £12,000 allowance for each provider.

The remaining part of the overall £20,000 ISA allowance does not have to be used. If you choose to use it, it may be available for other eligible ISA types subject to their rules and your circumstances.

The reform is not intended to reintroduce a one-Cash-ISA-per-year rule. The key restriction is the combined annual Cash ISA subscription amount.

How the 22% charge works

This is easy to misread as a new 22% personal tax bill for the saver. HMRC’s published package instead says the charge is paid by the ISA manager to HMRC on interest or alternative-finance return paid or credited on cash held inside a Stocks & Shares ISA or Innovative Finance ISA.

The individual does not need to declare that ISA interest to HMRC, and the Personal Savings Allowance does not apply to growth or interest inside an ISA. The policy is designed to discourage people from using non-Cash ISAs simply as an alternative home for large cash balances.

Money Market Funds: what the new restriction actually targets

The planned rule does not ban Money Market Funds from non-Cash ISAs. HMRC says cash-like assets can remain as a partial allocation. The restriction targets a non-Cash ISA account whose investments are made up entirely of cash-like assets.

HMRC says the initial definition of cash-like assets will be limited to Money Market Funds. Ordinary shares, investment trusts, ETFs, corporate bonds and government bonds such as gilts are not automatically treated as cash-like under this measure simply because they may be held inside a Stocks & Shares ISA.

Transfers: the direction matters

Under the published package, people under 65 would no longer be able to transfer from a Stocks & Shares ISA or Innovative Finance ISA into a Cash ISA. Transfers in the other direction – from a Cash ISA to a non-Cash ISA – remain possible.

The restriction is intended to be disapplied from the start of the tax year in which a person turns 65.

Formal Cash ISA-to-Cash ISA transfers are not the target of this restriction. As now, using the receiving provider’s formal ISA transfer process is important if you want to keep transferred money inside the ISA wrapper.

Flexible ISAs: current rules still matter

Under current flexible ISA rules, a provider may allow you to withdraw cash and replace it during the same tax year without the replacement counting again towards the overall annual ISA subscription limit. Flexibility is optional, so not every ISA offers it.

The government has not presented the 2027 Cash ISA reform as the abolition of flexible ISAs. However, because the new £12,000 Cash ISA sub-limit creates an additional limit for under-65s, the exact interaction between replacement subscriptions and that new sub-limit should be checked against the final regulations and provider guidance before relying on flexibility after 6 April 2027.

National Insurance number requirement: now deferred to April 2028

A separate ISA reporting change had been expected to require existing ISA customers who are eligible for a National Insurance number to provide it before making a further subscription from April 2027. HMRC has since deferred that requirement for existing ISA account holders until April 2028, alongside the postponed Digitalisation of ISA Reporting programme.

This is separate from the £12,000 Cash ISA reform. Providers may still ask customers to confirm identifying information, but the specific existing-customer NI-number subscription requirement should not be presented as an April 2027 change.

Why the government is making the change

The government says the lower Cash ISA limit is intended to encourage more retail investment. The anti-circumvention rules are designed to reduce the ability to recreate a £20,000 cash allowance inside non-Cash ISAs.

That policy aim does not mean investing is automatically suitable for money that would otherwise be kept in cash. Emergency savings and money needed in the short term have different risk and access needs from long-term investments, whose value can fall.

A practical checklist before April 2027

Official sources checked

• GOV.UK – Budget 2025 ISA reform announcement
• HMRC – ISA reform 2027 anti-circumvention factsheet
• HMRC – Tax-free savings newsletter 22
• HMRC – Tax-free savings newsletter 21 (NI-number deferral)
• HMRC – draft ISA amendment regulations technical consultation
• GOV.UK – current flexible ISA rules