Cash ISA rules are changing. Time to check your plan?

What’s changing – and when

ISAs have long been a simple way to invest tax efficiently. Currently, you can place up to £20,000 a year into ISAs and split this allowance across Cash ISAs, Stocks & Shares ISAs and Innovative Finance ISAs as you choose.¹

However, following announcements in the 2025 Autumn Budget, the rules are set to change.

From 6 April 2027, anyone under the age of 65 will be limited to contributing £12,000 a year into a Cash ISA². The overall £20,000 ISA allowance will remain, but any additional contributions will need to go into non-cash investments.

The government’s intention is to encourage more people to move away from holding cash and towards investing for the long term, supporting wider economic growth.

New limits on holding cash within investment ISAs

Alongside the lower Cash ISA cap, further measures are being introduced to prevent investors from working around the rules.

HMRC has proposed anti-circumvention rules² designed to reduce the appeal of keeping cash within Stocks & Shares ISAs or Innovative Finance ISAs.

These include:

• A 22% charge on interest earned from cash holdings held within these ISAs¹
• Restrictions preventing transfers from non-cash ISAs into Cash ISAs
• Limits on holding entirely ‘cash-like’ positions

Taken together, these changes aim to shift behaviour towards long-term investing rather than short-term cash holding.

It’s worth noting that these restrictions won’t apply to those aged 65 and over, recognising that investment risk may be less suitable later in life.

A mixed reaction from the industry

Feedback across the financial sector has been cautious.³

Introducing age-based allowances and adding tax elements into what has traditionally been a tax-free system could make ISAs harder to follow. There are also concerns this added complexity may discourage some people from making full use of their allowance.

Industry commentators have suggested the proposals risk making a straightforward product more complicated, potentially undermining the goal of encouraging greater investment.⁴

What this could mean for you

If you currently rely on Cash ISAs, or hold cash within investment ISAs, these changes could affect how you make use of your allowance.

There’s no immediate need to act – but it’s a good time to review whether your current approach still fits your long-term plans.

At Amicus Wealth Management, we focus on clear, practical advice tailored to you.

We’ll help you understand how these changes may affect your financial plan and whether any adjustments could be beneficial.

Speak to us

If you’d like to discuss what these changes could mean for you, please get in touch with your adviser in the usual way.

Important information

This article is for general information only and does not constitute financial, investment or tax advice. Tax treatment depends on your individual circumstances and may change in the future.

Investments can fall as well as rise in value, and you may get back less than you originally invested. If you are unsure whether any action is appropriate, please speak to a financial adviser.

Sources

¹ HMRC Tax-free savings newsletter 19 – November 2025 – GOV.UK
² HMRC ISA reform 2027: anti-circumvention rules factsheet – GOV.UK
³ Reeves’ new tax charge on cash ISAs faces fierce industry backlash and Cash Individual Savings Account: Government Response
⁴ The lang cat consultancy, response to HMRC ISA reform proposals, June 2026.