Finance
Cash ISA Rules Are Changing in 2027: What UK Savers Should Do Before April
The government has decided to introduce a £12,000 annual Cash ISA subscription limit for people under 65 from 6 April 2027. The overall ISA allowance will remain £20,000, but draft rules also change some transfers and the treatment of cash held inside non-Cash ISAs.
What changes in April 2027
New subscriptions across your Cash ISAs will be limited to £12,000 per tax year.
Under the published draft rules, the £20,000 Cash ISA limit would apply for the whole tax year in which you turn 65.
The government has announced the policy, but the regulations published in July 2026 are still undergoing technical consultation. The detailed rules could change before the final regulations are made.
Money already held in a Cash ISA will remain inside the tax-free wrapper. However, the proposed transfer restrictions may affect how you can move money between different ISA types after 6 April 2027.
What the Current Rules Say
During 2026/27, UK adults can subscribe up to £20,000 across their ISAs. The allowance can be placed in one account or divided between Cash, Stocks and Shares, Innovative Finance and Lifetime ISAs.
Since April 2024, adults can subscribe to more than one ISA of the same type during a tax year, provided the combined subscriptions stay within the relevant limits. The main exception is the Lifetime ISA, where you can subscribe to only one account in a tax year.
A Lifetime ISA has its own £4,000 annual limit, which counts towards the overall £20,000 ISA allowance. Eligible contributions receive a 25% government bonus.
What’s Changing – and When
| Change | Published plan |
|---|---|
| Cash ISA limit for people under 65 | £12,000 across new Cash ISA subscriptions |
| Cash ISA limit for people aged 65 or over | £20,000. Under the draft rules, this applies for the whole tax year in which you turn 65. |
| Overall ISA allowance | Remains £20,000 |
| Non-Cash ISA to Cash ISA transfers | Not permitted for people under 65 |
| Cash ISA to non-Cash ISA transfers | Still permitted |
| Cash held inside a non-Cash ISA | Interest will face a 22% charge paid by the ISA manager |
| Money-market funds | A non-Cash ISA cannot consist entirely of money-market funds |
| Existing Cash ISA balances | Remain inside the ISA wrapper |
The published plans are set out in the government’s ISA reform factsheet and the draft regulations.
The £12,000 Cash Sub-Limit Explained
For someone under 65, the £12,000 limit will apply to new Cash ISA subscriptions across all Cash ISA accounts combined. It is not a separate £12,000 limit for each provider.
The remaining £8,000 of the overall £20,000 ISA allowance could be used in a Stocks and Shares or Innovative Finance ISA, subject to the product rules. You are not required to invest the remaining allowance.
Based on the published draft rules, the government is not reintroducing a one-Cash-ISA-per-year restriction. You should still be able to use more than one Cash ISA, provided your combined new cash subscriptions remain within the applicable limit.
Still allowed
- Keeping existing Cash ISAs open
- Using more than one Cash ISA within the combined limit
- Formal transfers between Cash ISA providers
- Holding Cash and Stocks and Shares ISAs at the same time
- Transferring from a Cash ISA to a non-Cash ISA
Changing for under-65s
- New Cash ISA subscriptions above £12,000
- Transfers from Stocks and Shares or Innovative Finance ISAs into Cash ISAs
- Holding an entire non-Cash ISA portfolio in money-market funds
- Earning interest on cash inside a non-Cash ISA without the proposed 22% charge
Why the Government Is Making the Change
The government says the lower Cash ISA limit is intended to encourage more retail investment. The additional rules are designed to stop people recreating a £20,000 cash allowance inside Stocks and Shares or Innovative Finance ISAs.
Cash and investments serve different purposes. Cash may be more suitable for emergency funds and spending planned within the next few years. Investments may offer higher long-term returns, but their value can fall. The new rules do not mean that investing is automatically the right choice for every saver.
What this means during 2026/27
The existing rules continue until 5 April 2027. Adults can currently subscribe up to £20,000 across their ISAs and can use more than one Cash ISA.
There is no need to make a rushed transfer solely because of the 2027 reform. Compare interest rates, access conditions, withdrawal penalties and transfer terms before changing provider. Always use the provider’s formal ISA transfer process instead of withdrawing the money yourself.
Flexible ISAs
A Flexible ISA allows you to withdraw money and replace it during the same tax year without reducing your remaining allowance.
For example, if you subscribe £10,000 and later withdraw £3,000, a flexible account may allow you to replace that £3,000 during the same tax year. With a non-flexible ISA, the withdrawal does not restore the used allowance.
Not every provider offers flexibility, and the published 2027 reform does not require all providers to introduce it. Check the account terms before opening or transferring an ISA. See the current GOV.UK flexible ISA rules.
What to Do Before April 2027
Review your existing ISAs
Use statements and provider apps to list your balances, current-year subscriptions, interest rates and access conditions.
Decide what the cash is for
Separate emergency and short-term savings from money that you will not need for several years. Do not invest money simply to use the remaining ISA allowance.
Track new subscriptions
From April 2027, people under 65 will need to keep their combined Cash ISA subscriptions within the planned £12,000 limit.
Use formal ISA transfers
Ask the new provider to arrange the transfer. Withdrawing and redepositing the money yourself can use your annual allowance or remove the money from its tax-free wrapper.
Do the new rules affect money already in my Cash ISA?
The £12,000 limit applies to new subscriptions from 6 April 2027. Existing balances can remain in their Cash ISA, although the new transfer rules may affect future moves between different ISA types.
Can I still use more than one Cash ISA?
Under current rules, yes. The published 2027 proposals introduce a combined cash subscription limit, not a one-account rule.
Can I transfer between Cash ISA providers after April 2027?
The published restrictions target transfers from non-Cash ISAs into Cash ISAs for people under 65. They do not prohibit formal Cash ISA to Cash ISA transfers. Check the final regulations and provider terms before acting.
What happens to my Lifetime ISA?
The published plans retain the £4,000 Lifetime ISA limit. It continues to count towards the overall ISA allowance and eligible contributions receive a 25% government bonus. A 25% withdrawal charge normally applies outside the permitted circumstances. See the current Lifetime ISA rules.