UK Cash ISA Allowance
Calculator — 2027 Change
The government has announced that from 6 April 2027 under-65s can pay just £12,000 a year into a Cash ISA, while the overall £20,000 ISA allowance stays the same. See how much you can still shelter in cash, what gets pushed into a Stocks & Shares ISA or a taxable account, and the tax on the interest that no longer fits.
Read the full answer — method, rates and figures
Quick answer: Today (2026-27 tax year) you can pay the full £20,000 ISA allowance into a Cash ISA, and all interest inside an ISA is tax-free. The government has ANNOUNCED — but not yet legislated — that from 6 April 2027 the Cash ISA limit for savers under 65 will fall to £12,000, with the overall £20,000 ISA allowance unchanged (the remaining £8,000 can go into a Stocks & Shares or Innovative Finance ISA).
Savers aged 65 and over would keep the £20,000 Cash ISA limit. Source: GOV.UK 'ISA reform 2027' factsheet (23 June 2026) and Autumn Budget 2025 — draft regulations (The Individual Savings Account (Amendment) Regulations 2026) were published 16 July 2026 and their technical consultation closed on 2 August 2026, but they have not been laid before Parliament and are due to be laid in autumn 2026, so this is a proposed/announced change, not current law, and the exact figure could still change.
Outside an ISA, savings interest is covered by the Personal Savings Allowance (£1,000 basic-rate, £500 higher-rate, £0 additional-rate, frozen since 2016); interest above the PSA is taxed at your marginal rate (20%/40%/45%).
Capped at the £20,000 overall ISA allowance. Today the full £20,000 can go into cash.
Under the announcement, savers aged 65+ keep the full £20,000 Cash ISA limit — the reduction is aimed at under-65s.
Announced default: £12,000 for under-65s. This is a proposed change, not yet law — the figure is adjustable so you can model other outcomes.
Sets your Personal Savings Allowance (£500 tax-free) and the 40% rate on interest above it.
The rate paid on your cash. Used for the tax and illustration figures below.
Cash Sheltered Today
£20,000
up to the full £20,000
Cash Sheltered From 2027
£12,000
cash limit £12,000
Pushed Out of Cash ISA
£8,000
into a S&S ISA or taxable
Tax on Excess Interest / yr
£0
if kept as taxable cash
Save your Cash ISA plan
Richify tracks your ISAs and cash in one view, so you can see how the 2027 limit changes your savings.
Pushed out of Cash ISA
£8,000
Sheltered today
£20,000
Sheltered from 2027
£12,000
Tax on excess interest
£0
Today — 2026-27 (current law)
- • Overall ISA allowance: £20,000
- • Cash ISA limit: £20,000 (the full allowance)
- • Cash you can shelter tax-free: £20,000
- • All interest inside the ISA is tax-free
From 6 April 2027 — announced (not yet law)
- • Overall ISA allowance: £20,000 (unchanged)
- • Cash ISA limit: £12,000 (announced)
- • Cash you can shelter tax-free: £12,000
- • £8,000 must go into a S&S/IF ISA (tax-free) or a taxable account
If you keep the excess as cash (taxable), the tax on the interest
- • Excess cash outside the Cash ISA: £8,000
- • Interest at 4.5%: £360 per year
- • Less your Personal Savings Allowance (Higher 40% band): £500 tax-free
- • Taxable interest: £0
- • Tax at 40%: £0 per year (net interest £360)
⚠ Moving the excess into a Stocks & Shares (or Innovative Finance) ISA instead keeps it within the £20,000 allowance and tax-free — but its value can rise or fall. The PSA is shared across all your savings interest; if other accounts already use it, the tax here could be higher.
Where does the £8,000 do better over 10 years?
An illustration of the amount pushed out of your Cash ISA, either kept as taxable cash or moved into a Stocks & Shares ISA. This is not a forecast — investments can fall as well as rise, and you could get back less than you put in.
Taxable cash at 4.5%
£12,405
interest taxed above your PSA
S&S ISA at 5.0%
£13,031
tax-free, but value can fall
Illustration assumes a constant 4.5% cash rate and a constant 5.0% S&S growth rate, the full PSA available against the cash interest each year, and no withdrawals. Real returns vary. Educational only — not a recommendation to invest.
Is the Cash ISA allowance being cut in 2027?
The government has announced that from 6 April 2027 the amount a saver under 65 can pay into a Cash ISA each year will fall to £12,000, down from the £20,000 you can put in cash today. The overall £20,000 ISA allowance is unchanged — the remaining £8,000 can still be paid into a Stocks & Shares (or Innovative Finance) ISA. Savers aged 65 and over keep the full £20,000 Cash ISA limit. This was announced at Autumn Budget 2025 and confirmed in a GOV.UK factsheet published 23 June 2026.
Crucially, this is a proposed/announced change, not current law. Draft regulations were published on 16 July 2026 and their technical consultation closed on 2 August 2026, but they have not been laid before Parliament; the government has said they will be laid in the autumn to come into force on 6 April 2027 — so the detail could still change. For the current 2026-27 tax year nothing has changed: you can still pay the full £20,000 into a Cash ISA. Always confirm the position on gov.uk before acting. Use our ISA calculator to compare Cash, Stocks & Shares and Lifetime ISA outcomes.
Saving for a first home and aged 18 to 39? A Lifetime ISA can also hold cash: up to £4,000 a year of your £20,000 overall allowance, with a 25% government bonus of up to £1,000 a year, and no withdrawal charge when you buy a first home costing £450,000 or less or once you are 60. Our Lifetime ISA calculator works out the bonus and what an early withdrawal would cost.
What exactly is announced — and what stays the same
| Rule | Today (2026-27) | Announced from 6 Apr 2027 |
|---|---|---|
| Overall ISA allowance | £20,000 | £20,000 (unchanged) |
| Cash ISA limit (under 65) | £20,000 | £12,000 |
| Cash ISA limit (65 and over) | £20,000 | £20,000 (protected) |
| Interest inside any ISA | Tax-free | Tax-free (unchanged) |
| Legal status | Current law | Announced — not yet legislated |
Sources: GOV.UK, “ISA reform 2027: anti-circumvention rules factsheet” (published 23 June 2026); Autumn Budget 2025. The factsheet confirms the £12,000 under-65 limit, the £20,000 over-65 protection and the unchanged £20,000 overall allowance, and states the change comes into force from 6 April 2027 once regulations are laid. Personal Savings Allowance figures: GOV.UK “Tax on savings interest” (HMRC) — £1,000 basic-rate, £500 higher-rate, £0 additional-rate, frozen since April 2016.
This calculator is for education only and is not financial, tax or legal advice. The 6 April 2027 Cash ISA change is an announced government proposal, not current law — draft regulations were published on 16 July 2026 and their technical consultation closed on 2 August 2026, but they have not been laid before Parliament and are due to be laid in autumn 2026, so the £12,000 figure and other details could still change; the new cash limit is left adjustable for that reason. The tool simplifies: it assumes your planned cash is within the £20,000 allowance, that the full Personal Savings Allowance is available against the excess interest, constant interest and growth rates, and no withdrawals. Investments can fall as well as rise. Figures: GOV.UK “ISA reform 2027” factsheet (23 June 2026), Autumn Budget 2025, and HMRC savings-interest guidance. Last updated: August 2026. Verify the current rules on gov.uk and speak to a regulated financial adviser before acting.
Last reviewed 13 October 2026 by the Richify AI agent team.
Reviewed by Felix, Richify's AI CFO — an AI author, presented as one.
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This tool compares two positions for the same planned cash saving: the rules today and the announced change from 6 April 2027. It is important that the two are not confused — the 2027 figure is announced, not yet law.
Current law (2026-27 tax year). Every UK adult has a £20,000 annual ISA allowance, and right now the entire £20,000 can be paid into a Cash ISA if you wish. Interest earned inside any ISA is completely tax-free. Outside an ISA, savings interest is covered by the Personal Savings Allowance — £1,000 tax-free for basic-rate (20%) taxpayers, £500 for higher-rate (40%) taxpayers and £0 for additional-rate (45%) taxpayers (frozen since April 2016). Interest above your PSA is taxed at your marginal income tax rate. So today, all of your planned cash — up to £20,000 — can be sheltered from tax in a Cash ISA. (Source: GOV.UK “Individual Savings Accounts” and “Tax on savings interest”, HMRC.)
The announced change (from 6 April 2027 — status: announced, not yet law). At Autumn Budget 2025 the government announced that from 6 April 2027 the amount a saver under 65 can pay into a Cash ISA each year would be reduced to £12,000. The overall £20,000 ISA allowance is unchanged — the remaining £8,000 can still be used in a Stocks & Shares (or Innovative Finance) ISA. Savers aged 65 and over would keep the full £20,000 Cash ISA limit. A GOV.UK factsheet (23 June 2026) confirmed these figures. Draft regulations followed on 16 July 2026 and their technical consultation closed on 2 August 2026, but they have not yet been laid before Parliament; the government has said they will be laid in the autumn to take effect on 6 April 2027. Because it is not yet law, this calculator makes the new cash limit adjustable (default £12,000). If you only want cash, anything above the new limit would have to sit in a taxable account, where interest above your PSA is taxed at your marginal rate — which is what the “tax on excess interest” figure shows.
The final block illustrates the amount pushed out of your Cash ISA growing in a taxable cash account versus a Stocks & Shares ISA at an assumed growth rate. This is an illustration only: investments can fall as well as rise. This page pairs with our UK ISA calculator, which compares Cash ISA, Stocks & Shares ISA and LISA outcomes in more detail. Sources: GOV.UK “ISA reform 2027: anti-circumvention rules factsheet” (23 June 2026); Autumn Budget 2025; HMRC savings-interest guidance. Last reviewed August 2026 — verify on gov.uk before acting.
How to use this calculator
- Enter how much you plan to pay into a Cash ISA this tax year — up to the £20,000 overall ISA allowance.
- Tick the box if you will be 65 or over, which (under the announcement) keeps your Cash ISA limit at the full £20,000.
- Check or adjust the announced new cash limit. It defaults to the announced £12,000 for under-65s, but you can change it because the figure is not yet law.
- Pick your income tax band — this sets your Personal Savings Allowance (£1,000 / £500 / £0) and the rate charged on any interest that no longer fits in a Cash ISA.
- Enter the interest rate you expect on cash, plus an illustration horizon and an assumed Stocks & Shares ISA growth rate, then read the outputs: cash still sheltered vs today, the amount forced into a S&S ISA or a taxable account, the tax on excess interest, and a cash-vs-S&S illustration.
❓ Frequently Asked Questions
Is the cash ISA allowance being cut?
It has been announced, but it is not yet law. At Autumn Budget 2025 the government said that from 6 April 2027 the amount a saver under 65 can pay into a Cash ISA each year will fall to £12,000, from the £20,000 you can currently put in cash.
A GOV.UK factsheet published 23 June 2026 confirmed the figure and the 6 April 2027 start date. However, it is not law yet.
Draft regulations were published on 16 July 2026 and their technical consultation closed on 2 August 2026; the regulations have not been laid before Parliament, and the government said they would be laid in the autumn to bring the change into force — so the detail could still change before it becomes law. For the current 2026-27 tax year nothing has changed: you can still pay the full £20,000 into a Cash ISA today.
When does the new cash ISA limit start?
The announced start date is 6 April 2027 — the beginning of the 2027-28 tax year. It does not apply to the current 2026-27 tax year or to money you have already saved: existing Cash ISA balances are not affected, and for now you can still subscribe up to the full £20,000 in cash.
The change takes effect only once the regulations are laid and come into force. Until then it is a proposed/announced change, not current law.
If you want to make the most of a larger cash allowance, the tax years up to and including 2026-27 are when the full £20,000 cash subscription is still available.
What is the new cash ISA limit?
The figure announced by the government is £12,000 a year for savers under 65, confirmed in the GOV.UK ISA reform factsheet published 23 June 2026. Savers aged 65 and over would keep the full £20,000 Cash ISA limit.
The change is not yet law: the draft regulations completed their technical consultation on 2 August 2026 but have not been laid before Parliament. Because of that, this calculator lets you adjust the new cash limit yourself — the default is set to the announced £12,000, but you can change it to model a different outcome if the final figure moves.
Always confirm the current rules on gov.uk before making decisions, as announced tax measures can be amended or withdrawn before they take effect.
Does the £20,000 ISA allowance change?
No. The announced change does not touch the overall £20,000 annual ISA allowance — it only limits how much of that £20,000 can go into a Cash ISA. Under the announced rules a saver under 65 could pay up to £12,000 into a Cash ISA and the remaining £8,000 into a Stocks & Shares ISA (or an Innovative Finance ISA) to keep the whole £20,000 tax-sheltered.
The government's stated aim is to nudge savers toward investing rather than holding large cash balances, not to reduce the total you can shelter. If you only want cash, the portion above the new cash limit would have to sit in a taxable account instead, where interest can be taxed.
Will over-65s be affected?
According to the announcement, no. The GOV.UK factsheet (23 June 2026) states that individuals aged 65 and over will keep a Cash ISA limit of £20,000 — the reduction to £12,000 is aimed at savers under 65.
In this calculator you can tick the 65-or-over box to apply the full £20,000 cash limit and see that the change leaves your cash sheltering unaffected. As with the rest of the reform, this exemption is part of an announced measure that is not yet legislated, so confirm it on gov.uk before relying on it.
The reasoning given is to protect older savers who rely more heavily on cash for income and security.
Should I use a stocks and shares ISA instead?
That depends on your goals, time horizon and attitude to risk — this tool illustrates the trade-off but is not advice. A Stocks & Shares ISA keeps money within the £20,000 allowance tax-free and has historically produced higher long-run returns than cash, but its value can fall as well as rise and you could get back less than you put in, so it is generally considered for money you will not need for at least five years.
Cash is more suitable for an emergency fund or short-term goals. The illustration below compares the amount pushed out of your Cash ISA growing in a taxable cash account (with interest taxed above your Personal Savings Allowance) versus in a Stocks & Shares ISA at an assumed growth rate you choose.
Speak to a regulated financial adviser before acting.
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Further Reading
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