Cash ISA Limit 2027/28 — £12,000 Rule, Age 65 Exception & Planning

From 6 April 2027, the published UK measure reduces the annual Cash ISA subscription limit to £12,000 for people under 65. The overall adult ISA subscription limit remains £20,000, so the remaining amount can still be used for eligible non-cash ISAs, subject to the rules of the account you choose.

This is a limit on new subscriptions during the tax year. It is not a £12,000 cap on the value of an existing Cash ISA, on withdrawals, or on interest already sheltered inside the wrapper. Savers aged 65 or over keep the published £20,000 Cash ISA limit. The relevant age rule applies from the start of the tax year in which the saver turns 65, so check the final regulations and provider process if a birthday falls close to 6 April.

Use the ISA Calculator→ to model contributions and the Savings Interest Calculator→ to compare any cash held outside an ISA. For the wider 2026/27 wrapper rules, see the ISA Allowance guide.

What changes on 6 April 2027?

The published measure changes the annual subscription limit for the cash component of an adult ISA:

The Cash ISA figure is not an extra £12,000 on top of £20,000. It is a sub-limit inside the overall adult ISA allowance. A person under 65 who subscribes £12,000 to a Cash ISA can generally use up to £8,000 of the overall allowance for other eligible adult ISA subscriptions, provided the relevant product rules are met.

The policy is described in HMRC's recent tax information and impact note and in the ISA reform factsheet. Those materials describe the measure and its intended anti-circumvention rules; account providers should confirm the operational position before the 2027/28 tax year opens.

Policy status: published measure, implementation still to check

The £12,000 limit and the £20,000 age-based exception are published government measures with an operative date of 6 April 2027. They should not be described as a current 2026/27 account rule. HMRC's September 2026 policy paper says the Individual Savings Account Regulations will be amended, while the accompanying factsheet says regulations will be laid before commencement and that a technical consultation with industry will take place. The published policy is therefore a strong planning basis, but provider systems, final drafting and implementation instructions can still matter.

This distinction is important for a saver making a contribution before 6 April 2027. The existing tax-year rules govern the contribution when it is made; the new limit is not a reason to retrospectively reclassify a valid 2026/27 subscription. Keep a record of the payment date, the tax year, the account type and the provider's confirmation. If a payment straddles the tax-year boundary or is made through a regular-payment instruction, ask the provider how it allocates the subscription.

Three planning examples

An under-65 saver who pays £12,000 into a Cash ISA in 2027/28 has up to £8,000 of the £20,000 adult allowance left for another eligible adult ISA. That is an allowance illustration, not a recommendation to invest the balance. The saver must also consider any Lifetime ISA payment, because the £4,000 LISA contribution is inside the £20,000 overall limit.

An under-65 saver who pays £8,000 into a Cash ISA has a larger unused cash sub-limit, but cannot automatically carry it forward or add it to the overall allowance. ISA subscriptions are annual and unused allowance normally expires at the end of the tax year. The provider's product and transfer rules still apply.

A saver who turns 65 during 2027/28 may qualify for the £20,000 Cash ISA limit from the start of that tax year under the published measure. The result is not based simply on whether the person has already had their birthday on the day of the first payment. Check the tax year in which the birthday falls and keep evidence if the provider asks for it.

Cash held in non-cash ISAs

The reform is broader than the £12,000 subscription number. HMRC's factsheet says that cash can still be held in a Stocks and Shares ISA or Innovative Finance ISA, but a flat 22% charge will apply to interest or alternative-finance return paid on cash held there. The ISA manager, not the individual, is expected to pay the charge to HMRC, and the individual is not required to declare that ISA interest to HMRC. The Personal Savings Allowance does not apply to growth or interest paid in an ISA.

The factsheet also identifies Money Market Funds as the relevant cash-like asset for the new anti-circumvention rules. A portfolio containing some cash-like exposure is not automatically prohibited, but a non-cash ISA made up entirely of those assets can become non-qualifying under the published proposal. Ordinary shares, funds, investment trusts, exchange-traded funds and government or corporate bonds are described separately in the factsheet, but a provider should confirm how a particular product is classified.

Transfer and provider checks

For an under-65 saver, the published policy would restrict transfers from a Stocks and Shares ISA or Innovative Finance ISA into a Cash ISA, while a Cash ISA to non-cash ISA transfer remains possible. This is different from withdrawing money and paying it into another account. A withdrawal can lose ISA shelter and may use the annual subscription allowance again unless the account is flexible and the provider's conditions are met.

Before acting, ask the provider whether the transaction is a formal ISA transfer, which tax year is affected, whether the receiving account can accept it and whether any part of the holding is cash-like. Also check the effective date. The published factsheet says the transfer restriction is disapplied for individuals entitled to the higher £20,000 Cash ISA limit from the start of the tax year in which they turn 65, but the charge on interest in non-cash ISAs and the cash-like asset rules remain relevant.

What does “subscription limit” mean?

A subscription is new money paid into an ISA during the tax year. The limit therefore concerns what you add, not the balance accumulated from earlier years.

For example, if an under-65 saver has £80,000 already held in a Cash ISA on 6 April 2027, the new £12,000 limit does not force the balance down to £12,000. The saver can keep the existing account and interest subject to the normal ISA rules. The limit applies to new subscriptions made during 2027/28.

The same distinction matters for withdrawals. The £12,000 figure is not a withdrawal ceiling and does not mean that a saver can only access £12,000. A flexible ISA may allow withdrawn money to be replaced in the same tax year, but flexibility is a product-specific feature. Check the provider's terms before treating a withdrawal as reusable allowance.

Who keeps the £20,000 Cash ISA limit?

The published measure says that savers aged 65 and over retain the £20,000 Cash ISA limit. It also describes the higher limit as applying from the start of the tax year in which an individual turns 65.

This creates a timing question for people whose 65th birthday is near the tax-year boundary. Do not rely on a general age calculator alone: check the final regulations, HMRC implementation material and the provider's process for identifying the applicable limit. The higher age-based limit does not increase the overall adult ISA limit above £20,000.

Can I put the other £8,000 into a Stocks & Shares ISA?

Potentially, yes. The published reform keeps the overall adult ISA limit at £20,000 and does not reduce the annual Lifetime ISA limit of £4,000. A saver under 65 who uses £12,000 in a Cash ISA may have up to £8,000 of the overall allowance available for eligible non-cash subscriptions, subject to product limits and any existing Lifetime ISA contribution.

That is a contribution-allocation decision, not a recommendation to invest. Cash is designed for capital stability and access; investments can fall in value and are normally considered over a longer time horizon. Keep near-term emergency spending and known commitments in an appropriate accessible account, and only use a Stocks & Shares ISA for risk you understand and can carry.

The 2027 reform does not turn every non-cash ISA into a cash substitute. HMRC's factsheet describes restrictions on transferring from a Stocks & Shares ISA or Innovative Finance ISA into a Cash ISA for people under 65, together with rules for certain cash-like assets. These are implementation-sensitive details, so use the provider's transfer process and confirm eligibility before acting.

What happens to existing Cash ISA transfers?

The published materials distinguish new subscriptions from transfers. A formal ISA transfer is not the same as withdrawing money and paying it into another account. Use the provider's ISA transfer process if you want to move an existing ISA, and do not assume that a cash withdrawal followed by a new deposit preserves the wrapper or the allowance.

For under-65 savers, the 2027 anti-circumvention material says transfers from non-cash ISAs into Cash ISAs will be restricted, while transfers from Cash ISAs to non-cash ISAs remain possible. The final rules and provider workflows matter, particularly where an account contains a mixture of assets or cash-like investments.

How should I plan for 2027/28?

Cash ISA limit: common mistakes

• Treating £12,000 as a balance cap. It is a published annual subscription limit for under-65 savers, not a limit on existing holdings.
• Adding £12,000 on top of £20,000. The Cash ISA limit sits within the £20,000 adult ISA limit.
• Forgetting a Lifetime ISA contribution. A LISA payment uses part of the £20,000 adult limit even though its own annual cap is £4,000.
• Using a withdrawal instead of a formal transfer. The two routes have different allowance consequences and provider processes.
• Assuming every cash-like investment is unrestricted. The 2027 anti-circumvention rules include specific treatment for certain assets and transfers.

Frequently Asked Questions

Use the ISA Calculator→ to compare contribution splits, then read the Savings Interest Tax guide if some savings will remain outside an ISA. For retirement trade-offs, see Pension vs ISA.

Official sources

• HMRC: Cash Individual Savings Account limit reduction
• HMRC: ISA reform 2027 anti-circumvention rules factsheet
• HM Treasury: Budget 2025
• HMRC: Tax-free savings newsletter 19
• GOV.UK: Individual Savings Accounts