ISA changes 2027

PJZ

I'm reading the latest from HMRC. 

Tax-free savings newsletter 19 — November 2025

Published 27 November 2025

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.

I'm I misunderstanding this....

1.  If I hold cash and receive interest in a S&S or an IF ISA whilst deciding where to invest then I will pay tax on it after April 2027?   And I won't when I reach 65?

2. If I have P2P /IF ISA's that are lending my cash at present but not allowing re-investing for retail customers and cash is slowing increasing if they pay interest on the cash balance I will pay tax after April 2027?  

3. The uninvested cash available from an IF ISA can not be be transferred to a Cash ISA after April 2027?

Do I need to maximise my cash ISA position pre April 2027?

Alexland

Q1-2 generally yes if you are under 65 and holding a cash balance in a S&S ISA or IFISA then the government intend to apply some sort of penalty or tax on you with method to be determined but a tax on interest earned seems most likely.

Q3 yes they are looking to block transfers to Cash ISAs from other ISA types.

Q4 depends on your circumstances on how much you need to build up in Cash ISA(s)

PJZ

Alexlad,  Thank you for your replies.

It sounds like tax and tax and tax for me.

I don't want to hold too much cash,  however I assume most people do put things in cash until they decide what to invest in? and a prudent part of any investment strategy.  

As for taxing on my P2P cash - so wrong.... at this stage.  They stopped new investment now not even letting it run its course.   You cant trust them on anything.

I can't see how these rules help.  Its all too complicated.......This puts people off investing...... 



  

Alexland

PJZ said:

I can't see how these rules help.  Its all too complicated.......This puts people off investing...... 

Yes that's the argument that I've been making in the other threads that this 'Cash ISA' change does more harm to the S&S ISAs it is purporting to encourage.

While I have done some P2P via IF ISAs to pickup cashback incentives over the years with no loss my considered view is they are dangerous to people's wealth (looking like cash but with risk of sudden 100% unrecoverable loss) so should never have been allowed to become part of the ISA family.

Albermarle

When I had P2P accounts, I am pretty sure none of them paid interest on the cash account, but maybe some do.