The November 2025 Budget cut the amount most people can put into cash ISAs each year. From 6 April 2027, if you are under 65, you can pay in up to £12,000 a year in cash ISAs instead of £20,000. The overall ISA allowance stays at £20,000, so the other £8,000 can still go into a Stocks and Shares or Innovative Finance ISA.
This guide sets out what the Budget and HMRC have said, what changes and what doesn't, and what it means for regular savers, including anyone doing a savings challenge. It is general information, not personal financial advice. For the cash-or-investing decision itself, see our Cash ISA vs Stocks and Shares ISA guide.
What changes on 6 April 2027
The Budget 2025 document on GOV.UK says that from 6 April 2027 "the annual ISA cash limit will be set at £12,000, within the overall annual ISA limit of £20,000", and that savers over 65 "will continue to be able to save up to £20,000 in a cash ISA each year".
| Limit | 2026/27 (to 5 April 2027) | From 6 April 2027 |
|---|---|---|
| Overall ISA allowance | £20,000 | £20,000 |
| Cash ISA limit, under 65 | £20,000 | £12,000 |
| Cash ISA limit, 65 and over | £20,000 | £20,000 |
| Lifetime ISA | £4,000 | £4,000 |
| Junior ISA | £9,000 | £9,000 |
The same Budget fixed the overall £20,000 ISA limit, the £4,000 Lifetime ISA limit and the £9,000 Junior ISA and Child Trust Fund limit until 5 April 2031. It also said a new, simpler ISA for first-time buyers will eventually be offered in place of the Lifetime ISA.
The two extra rules
HMRC's technical note, published on 17 September 2026, adds two rules so the cap cannot be got round easily:
- Transfers from Stocks and Shares ISAs and Innovative Finance ISAs into cash ISAs will be restricted, so you cannot pay into an investment ISA and then move the money into cash.
- Interest paid on cash held inside a Stocks and Shares or Innovative Finance ISA will face a flat 22% charge, so an investment ISA cannot be used as a cash account.
- Money already in cash ISAs is not affected. The limit applies to new money paid in each tax year, not to the balance you have built up.
2026/27 is the last full £20,000 cash year
For under-65s, the current tax year, 6 April 2026 to 5 April 2027, is the last one in which the whole £20,000 allowance can go into cash. If you have savings sitting in an ordinary account and expect to want more than £12,000 a year in cash ISAs in future, this is the year to use the full cash allowance.
Check what you have already paid in since 6 April 2026 with our ISA allowance tracker, and remember that some providers stop taking new money a few days before 5 April. If you are moving an old cash ISA to a better rate, use an ISA transfer rather than withdrawing, or the money loses its tax-free status.
What it means if you are doing a savings challenge
For most people doing a savings challenge, nothing changes. The common challenges are well under £12,000 a year:
| Challenge | Saved in a year |
|---|---|
| 52-week challenge | £1,378 |
| 1p challenge (365 days) | £667.95 |
| 100 envelope challenge | £5,050 |
| All three together | £7,095.95 |
Even running all three in the same year leaves you more than £4,900 under the new cash limit. The cap starts to matter if you pay a lump sum into cash ISAs as well, such as a bonus, an inheritance or savings moved from an ordinary account, or if two challenges together with regular saving take you past £12,000 in one tax year.
One detail is worth knowing. ISA limits run by tax year (6 April to 5 April), but most challenges run by calendar year. A 52-week challenge starting on 1 January 2027 puts £105 in before 6 April (weeks 1 to 14) and the rest in 2027/28. The 1p challenge puts £45.60 in by 5 April. Neither gets close to either limit, but if you are near the cap, count by tax year.
If you want more than £12,000 a year in cash
Some savers want to keep everything in cash, for example because they are saving for a house deposit in the next couple of years or simply do not want investment risk. The cap does not make you invest. Your options for cash above £12,000 a year include:
- An ordinary savings account. Interest is tax-free up to your Personal Savings Allowance: £1,000 for basic rate taxpayers, £500 for higher rate and £0 for additional rate.
- Bear in mind that tax on savings income goes up by 2 percentage points across all bands from April 2027, so 22%, 42% and 47%. Interest above your allowance will be taxed a little more.
- Premium Bonds, where prizes are tax-free but not guaranteed.
- A Lifetime ISA if you are 18 to 39 and saving for a first home or later life, up to £4,000 a year with a 25% bonus and a charge if you withdraw for other reasons.
- If you have a partner, each of you has your own £12,000 cash limit and your own Personal Savings Allowance.
Using the other £8,000
The remaining £8,000 of the £20,000 allowance can go into a Stocks and Shares ISA or an Innovative Finance ISA. Investments can fall as well as rise, so this suits money you will not need for at least five years. If that is new to you, our guide to how a Stocks and Shares ISA works covers platforms and fees, and the compound interest calculator shows how regular amounts can add up over time.
Nobody has to use the full £20,000. If cash suits you and you save less than £12,000 a year, you can carry on exactly as now.
A simple checklist before April 2027
- Add up what you have paid into ISAs since 6 April 2026.
- Decide whether you want to use more of this year's £20,000 cash allowance before 5 April 2027.
- Work out roughly how much new cash you expect to save in 2027/28. If it is under £12,000, nothing changes for you.
- If it is over £12,000, decide what goes where: cash ISA, ordinary savings, Premium Bonds or investments.
- Keep your regular saving going. SYM, our app, can schedule a weekly or daily amount and remind you to move it into your ISA each month.
Frequently asked questions
When does the cash ISA limit change?
Is the overall ISA allowance being cut?
I am over 65. Does the £12,000 limit apply to me?
Will I lose the money already in my cash ISA?
Do the Junior ISA and Lifetime ISA limits change?
Does this affect a savings challenge like the 52-week challenge?
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