The New ISA Rules from 2026

Alibabastravels

Hello all!  I have a question about the new ISA rules coming into effect 2026/27.  I understand we will be limited to saving just £12,000 per year.  What happens if you already have £40,000 in your ISA (from years of saving) and need to keep transferring it to a new ISA at the end of every fixed ISA period? Will we be allowed to transfer a large sum to a new ISA EVERY year, since this wouldn't count as a new contribution? I'm pretty sure I read in Martin Lewis's recent breakdown of the new ISA rules, that we won't  be allowed to transfer in large sums from previous ISAs. I'm really confused! Just trying to work out how best yo move forward. I just can't risk investing.

flaneurs_lobster

New rules, from 2027/28 for new contributions, anything already in an ISA wrapper will not be impacted

.Alibabastravels said:

 I'm pretty sure I read in Martin Lewis's recent breakdown of the new ISA rules, that we won't  be allowed to transfer in large sums from previous ISAs. 

I'm pretty sure you didn't (unless you can quote the source).

singhini

The Treasury hasn’t officially confirmed the final rules yet. However, it’s likely that you will still be able to renew or transfer your existing Cash ISA savings into another Cash ISA, or transfer Cash ISA money into a Stocks & Shares ISA.

What you won’t be able to do under the proposed rules is transfer Stocks & Shares ISA funds back into a Cash ISA.

But we just don't know yet

eskbanker

There are no new rules coming in for 2026/27, but there should be answers to questions about them in good time for their introduction in 2027/28.

However, as now, the limit on annual contributions has no impact on transfers, so it'll remain possible to accumulate sizable balances across multiple years....

blue_eyes

....and depending on your age it might not even change

Gsaver1

Currently I have some monies in STMMF, I sell some of this monthly to invest in other funds I have. So come April 2027 will I have to transfer this to a cash ISA then get a monthly transfer from that into my S&S ISA? 

Why not just let us use our funds as we wish? 

dunstonh

Currently I have some monies in STMMF, I sell some of this monthly to invest in other funds I have. So come April 2027 will I have to transfer this to a cash ISA then get a monthly transfer from that into my S&S ISA? 

No.  If it follows what happened previously, when you couldn't hold cash in an S&S ISA tax-free, you would be taxed internally on it.   

However, since then, interest has been paid gross.  So, a possible change is that ISA providers will need to start issuing tax statements and report interest to HMRC.

Some platforms already offer a cash ISA.  So, a solution could be that you split your ISA investments with "cash like" going into the cash ISA segment and the longer term equities/bonds going into the S&S ISA.

Why not just let us use our funds as we wish? 

You can do what you wish outside of a tax wrapper.  However, tax wrappers have always had certain rules and those rules get tweaked from time to time.     

singhini

i don't understand?

you have S&S ISA and invest in STMMF
you sell some of the investment and the money is held in the same S&S ISA as cash
you now invest in other funds (all inside the S&S ISA wrapper
This (i assume) will stay the same post 2027

What we think is, you won't be able to move the cash held in S&S ISA to a pure cash ISA

But no one knows as the treasury hasn't decided what the rule will be yet. 

blue_eyes

Here's what was published recently. I'm sure we will here more (or possibly as with the Brit ISA, less) between now and April 2027. I've highlighted a few bits

3. Cash ISA limit

The government will make the following changes to ISAs from 6 April 2027:

• the annual subscription limit for a cash ISA will be set at £12,000 for investors under the age of 65
• for investors aged 65 and over the annual subscription limit for a cash ISA will remain at £20,000

The following rules will be introduced to avoid circumvention of the lower limit for cash ISAs:

• no transfers from stocks and shares and Innovative Finance ISAs to cash ISAs
• tests to determine whether an investment is eligible to be held in a stocks and shares ISA or is ‘cash like’
• a charge on any interest paid on cash held in a stocks and shares or Innovative Finance ISA

These rules will apply to investors under the age of 65.

Industry will be consulted on the draft legislation, which will be made by amendments to the ISA regulations, and laid before Parliament well ahead of April 2027.

from
https://www.gov.uk/government/publications/tax-free-savings-newsletter-19/tax-free-savings-newsletter-19-november-2025

Eyeful

Alibabastravels said:

Hello all!  I have a question about the new ISA rules coming into effect 2026/27.  I understand we will be limited to saving just £12,000 per year.  What happens if you already have £40,000 in your ISA (from years of saving) and need to keep transferring it to a new ISA at the end of every fixed ISA period? Will we be allowed to transfer a large sum to a new ISA EVERY year, since this wouldn't count as a new contribution? I'm pretty sure I read in Martin Lewis's recent breakdown of the new ISA rules, that we won't  be allowed to transfer in large sums from previous ISAs. I'm really confused! Just trying to work out how best yo move forward. I just can't risk investing.

For now, if you cannot risk investing, just keep sticking your money into CASH ISA's

You will just have to wait like the rest of us, until the Treasury officially confirms what the final rules are
and that will take some time. 

Who knows some of the things you are worrying about may not happen or may be watered down!

Gsaver1

dunstonh said:

Currently I have some monies in STMMF, I sell some of this monthly to invest in other funds I have. So come April 2027 will I have to transfer this to a cash ISA then get a monthly transfer from that into my S&S ISA? 

No.  If it follows what happened previously, when you couldn't hold cash in an S&S ISA tax-free, you would be taxed internally on it.   

However, since then, interest has been paid gross.  So, a possible change is that ISA providers will need to start issuing tax statements and report interest to HMRC.

Some platforms already offer a cash ISA.  So, a solution could be that you split your ISA investments with "cash like" going into the cash ISA segment and the longer term equities/bonds going into the S&S ISA.

Why not just let us use our funds as we wish? 

You can do what you wish outside of a tax wrapper.  However, tax wrappers have always had certain rules and those rules get tweaked from time to time.     

Thank you for your explanation. I will look into moving my STMMF to a cash ISA if indeed they are deemed not to be allowed in the S&S ISA. For the moment I will just continue as normal.