Upcoming ISA Rules, and MMFs

Qyburn

Hi,

I'm using the term "MMF" because I can link that to specific funds, like "Royal London Short Term Money Market Fund". Whereas the term "cash like" may take in things I know nothing about.

Roughly 50% of the comments I've seen say that you can hold MMF in your ISA so long as that fund doesn't make up 100% of your account. The other 50% say you can't hold any MMF because the fund itself comprises 100% MMF.

Is it not yet known, stated by the government, which is correct?

AdditionalAdditionally some have stated that this rule, either version, won't apply if you're over 65. Is that know for sure, either way?

k_man

This gov.uk page linked below has further details (albeit obviously still subject to change).

I read this as MMFs are okay, as long as they don't make up the whole ISA.

And the charge on interest (where applicable) applies to everyone.

https://www.gov.uk/government/publications/fiscal-events-2026-factsheets/isa-reform-2027-anti-circumvention-rules-factsheet

Extract (emphasis mine):

Non Cash ISA portfolios made up of 100% cash-like assets will be non-qualifying investments

Cash-like assets will be eligible for non Cash ISAs, provided that they are partial allocations and do not make up 100% of the investments in an individual’s non Cash ISA account.

Application to those 65 and over

Individuals aged 65 and over will benefit from a higher Cash ISA limit of £20,000, entitlement to which will apply from the start of the tax year in which an individual turns 65. The transfer restriction will be disapplied from this point. The charge on interest earned on cash held in non Cash ISAs and the prohibition on 100% cash-like investments will remain in place.

Qyburn

Thanks, that's a bit clearer.