Cash ISA + Cash Lifetime ISA Limits from 6 April 2027

sasass

From 6 April 2027 onwards:

1. Can I put £12,000 in a Cash ISA + £4,000 in a Cash Lifetime ISA. Total £16,000?
2. Does money put into a Cash Lifetime count towards the £12,000 limit on Cash ISA's?
3. Are Cash Lifetime ISA's separate to the Cash ISA Limit of £12,000?

eskbanker

A good question, and I'm not sure it's one that's been answered yet (the new rules are still being formulated).

The original 2025 budget announcement referred to a reduced 'ISA cash limit' rather than a 'cash ISA limit' as such: "From 6 April 2027 the annual ISA cash limit will be set at £12,000", which would suggest that the total maximum cash would be £12K not £16K.

The clarifying tax newsletter 19 then made it clear that it's specifically for cash ISAs ("the annual subscription limit for a cash ISA will be set at £12,000 for investors under the age of 65"), which would imply that cash LISAs are excluded from the new rules (as Lifetime ISA is a different ISA type from cash ISA) and therefore a £16K maximum would be possible.

However, the consultation document for the new first time buyer ISA goes the other way again for the new product: "These rules will also apply to FTB ISAs - the annual limit for Cash FTB ISAs will count towards the overall £12,000 cash ISA annual limit", although this doesn't necessarily imply a similar line of thinking for LISA.

Perhaps I've missed a clear explanation of how the cash LISA limit dovetails with the new cash ISA one somewhere along the line though - does anyone know of other relevant references?

masonic

Lifetime ISA is a single type of ISA. The Lifetime ISA has not been mentioned as being subject to the new rules, whereas cash ISAs, S&S ISAs, and IF ISAs have new rules attributed to them.

The Cash FTB ISA is likely to be a Cash ISA, like the HTB ISA was, not a new type. Whereas no Lifetime ISA that currently exists is a Cash ISA.