The government has published amended Individual Savings Account (ISA) regulations covering the reduction to the cash ISA limit that will take effect from 6 April 2027. The regulations include measures to prevent the circumvention of the new rules.
From 6 April 2027, the annual cash Individual Savings Account (ISA) limit for individuals under 65 will be reduced from £20,000 to £12,000.
- For individuals aged 65 or over, the annual cash ISA limit will remain at £20,000.
- The measure was originally announced at Autumn Budget 2025.
The new regulations confirm the reduction to the cash ISA limit and introduce anti-circumvention rules to prevent savers from sidestepping the reduced limit. These include:
- A flat rate charge at the savings basic rate on any interest paid on cash held in non-cash ISAs.
- Assuming no adjustment is announced in Autumn Budget 2026, the Savings basic rate for 2027-28 will be 22%.
- Restrictions on transfers from stocks and shares ISAs and Innovative Finance ISAs into cash ISAs.
- Rules relating to Money Market funds to prevent investors from using cash-equivalent investments within a stocks and shares ISA.
- Additional reporting requirements for ISA managers.
The Individual Savings Account (Amendment) (No. 2) Regulations 2026 have been laid before Parliament.
Useful guides on this topic
ISA Limits
What are the Individual Savings Account (ISA) investment limits? How much can I invest in an ISA each year?
ISA guide
What is an ISA? What are the limits? How are ISAs taxed?
Savings income: How interest is taxed
What is savings income? How is savings income taxed? What allowances are available? What is the Accrued Income Scheme?
External link
HMRC: Cash Individual Savings Account (ISA) limit reduction
The Individual Savings Account (Amendment) (No. 2) Regulations 2026