The New ISA Rules from 2026

Alexland

Eyeful said:

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

I really hope the changes don't happen.

If people are disallowed from holding money market funds, short term bonds, etc. then it stops them running their own derisking strategies using the building block component funds as they get closer to needing to use the S&S ISA money or running their own tactical asset allocation strategies to manage risk across the cycle when some assets are looking expensive compared to historic norms.

S&S ISAs are not supposed to be a retirement vehicle aiming for over 65 they are supposed to be for any point in adult life.

There are life events that S&S ISA holders go through (such as divorce, getting married, buying a bigger house, etc) where the S&S ISA holders may have good reason to transfer to cash or cash-like investments. They are not trying to bypass the pointless Cash ISA limit just manage their money in a sensible way and ensure their assets are at a suitable risk level for their circumstances.

Similarly there may be people who have good reason to put more than £12k pa in a Cash ISA for example if they are saving for a house maybe they have received a gift or small inheritance but still don't have suitable timescales before needing to spend the money to make a long term S&S investment.

So if this is supposed to be a crude nudge to get people investing it's more like a nudge to stop people making sensible choices on how to allocate their capital in accordance to their risk appetite, evolving needs and likely withdrawal timescales.

Catplan

Need to see the details in full, however, I can see me for example taking 20k out my stocks and share ISA, sticking it into pension, as while I’m working it becomes 25K straight away with the benefit of more tailored (some might say suitable) investment choices it seems…..

TurbulentCourage

I will reach 65 y.o. at the end of May 2027 (If I am still alive).

Does anyone know if I will be able to put £20000 into a cash ISA for the 2027/28 tax year from June onwards or will I be limited to £12000?

Ocelot

https://forums.moneysavingexpert.com/discussion/comment/81922634#Comment_81922634

You may be allowed, but the rules haven't been clarified yet, as far as I know.

Yorkie1

https://forums.moneysavingexpert.com/discussion/comment/81771133#Comment_81771133

This is assuming that you have sufficient income to allow the extra pension input

KKILP

I had an ISA that matured in March this year, withdrew all funds and opened up a new ISA with same company I couldnt transfer it to the new one had to take out and reopen a new one, however I will have over £30K (paid in 20K last week paying in 15K next week with the new tax rules), so come 2027 will I still be able to keep the money in this ISA but will only be able to invest £12k next year on top of this one or is it £12k in total, Im a bit unsure about these things

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81948738#Comment_81948738

Withdrawing and redepositing (as opposed to transferring) counts toward your current year contribution allowance unless the first ISA was flexible - was it?

In terms of your question, the plan is that annual contributions to cash ISAs will be reduced to £12K from £20K for under 65s, rather than imposing that limit on existing balances.

KKILP

Hi Eskbanker, I dont think it was flexible, It was fixed for one year, the new one wouldnt allow me to transfer into seemingly the type it was. So we can only have one ISA from next year totalling £12k not several each with 12K

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81948759#Comment_81948759

Did you actually withdraw the money from your maturing ISA and pay it into your current account before opening and funding a new ISA? If so, this will have counted towards your annual 2025/26 allowance, but if you hadn't already used that then there may not be a problem?

And no, the situation from next year isn't how you've summarised it - then, as now, you can have as many cash ISAs as you like, with as much in them as you like, but the total amount you can add to them in any tax year is £12K, down from the current £20K.

Malchester

The £12,000 rule for under 65s starts April 2027 not 2026. No changes this coming tax year.

As for withdrawing and putting the funds into another ISA:

If you have not subscribed to an ISA this financial year 6/4/25 to 6/4/26 you should be OK. If you have (and it is not a flexible ISA) then withdrawing and putting £20,000 back in before 6/4/26 will mean that you will have exceeded your annual allowance for this tax year. In such a case HMRC may or may not take action. I accidentally put £1 over the ISA allowance once but nothing happened.