Autumn Budget: Cash ISA limit cut to £12,000 a year

MSE_Emily

How much you can save into your cash ISA each year will be cut from £20,000 to £12,000 from April 2027, the Chancellor Rachel Reeves has confirmed – though only if you're under 65, a caveat MoneySavingExpert.com Martin Lewis had called for. The change was announced on Wednesday 26 November as part of the Government's Autumn Budget...

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Autumn Budget: Cash ISA limit cut to £12,000 a year 

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eskbanker

Cash ISA limit cut to £12,000 a year

[...]

How much you can save into your cash ISA each year will be cut from £20,000 to £12,000 from April 2027, the Chancellor Rachel Reeves has confirmed...

Not according to the published document, which states that the new limit relates to cash in ISAs, rather than 'cash ISAs' as such:

4.228 ISA Reform – From 6 April 2027 the annual ISA cash limit will be set at £12,000, within the overall annual ISA limit of £20,000

https://assets.publishing.service.gov.uk/media/6926eb102a37784b16ecf525/E03444720_Budget_2025_Web_Accessible.pdf

Vitor

The 65 age break is ridiculous, should be 55 as that's when people need to start derisking their investments 

kimwp

I'm a bit confused as to what this reduction means- does it mean that you can put 20k in a stocks and shares ISA, then transfer it to a cash ISA a year later?

Kim_13

kimwp said:

I'm a bit confused as to what this reduction means- does it mean that you can put 20k in a stocks and shares ISA, then transfer it to a cash ISA a year later?

We won’t know until we see the detail, which they have a year to work through given the change is effective April 2027.

Vitor

Of the face of it you can put £20k into an S&S ISA in 2026 and move that to a Cash ISA in 2027.

Money Market Funds (MMFs) are legally defined as investments not cash, so can't see how this could be limited to £12k in an S&S ISA

Repeat as needed. DYOR of course.

nirish

I'm intrigued as to what this means for the likes of my Trading212 Stocks and Shares ISA which pays interest on uninvested cash!

singhini

nirish said:

I'm intrigued as to what this means for the likes of my Trading212 Stocks and Shares ISA which pays interest on uninvested cash!

It shouldn't make any difference as its the annual allowance of money going into the ISA and not any growth.

singhini

eskbanker said:

Cash ISA limit cut to £12,000 a year

[...]

How much you can save into your cash ISA each year will be cut from £20,000 to £12,000 from April 2027, the Chancellor Rachel Reeves has confirmed...

Not according to the published document, which states that the new limit relates to cash in ISAs, rather than 'cash ISAs' as such:

4.228 ISA Reform – From 6 April 2027 the annual ISA cash limit will be set at £12,000, within the overall annual ISA limit of £20,000

https://assets.publishing.service.gov.uk/media/6926eb102a37784b16ecf525/E03444720_Budget_2025_Web_Accessible.pdf

i just got a mailer/email from Vanguard and they too confirm what your saying i.e. the ISA limit remains £20k but max £12k into cash ISA



Wording cut and pasted from the Vanguard document:

Has the ISA allowance changed?

The overall ISA allowance remains unchanged at £20,000. However, for those aged 65 and under, the amount you can put into cash ISAs will be capped at £12,000 a year from 6 April 2027, with the rest of the allowance reserved for investments. People aged over 65 will still be able to put up to £20,000 into cash ISAs.

happybagger

"65 and under"? 
not "under 65"?

Ceejay3000

A quick Google will show you that in 1999/00 there was also a split limit: £7000 Stocks and Shares, with a £3000 Cash ISA limit. So this is not a completely new arrangement.

I imagine that you'll be able to transfer to a cash ISA the next year, unless they start trying something complicated like getting Stocks & Shares ISA providers to track how much of the money you had put in over time was over the cash limit each year, and only letting you transfer that excess to another Stocks & Shares ISA or to a non-ISA account.

Andf we need to keep telling ourselves that this only starts in 2027/28. We have the rest of this tax year, and next tax year, with no change to ISA limits or the non-ISA savings tax rates. By this time next year we may have more of an idea as to how it will work.