The April 2027 ISA changes confirmed

The ISA regulations have landed. The Individual Savings Account (Amendment) (No. 2) Regulations 2026 have been laid before Parliament, and come into force on 6 April 2027 — the same day the cash limit drops. Three things change, and the third one is new. Interest your provider pays on cash held in a stocks & shares or innovative finance ISA carries a charge at the savings basic rate, 22% from April 2027. Under-65s can no longer transfer a non-cash ISA into a cash ISA, so it is not a decision you can unwind later. And a stocks & shares ISA can no longer consist entirely of money market funds — they are still allowed as part of the holding, just not as the whole of it, which was the neatest way to keep the overflow as cash in all but name. Here is the sum worth doing: the charge is set at the savings basic rate, which is the same 22% a basic-rate saver already pays on interest with no wrapper at all. For them the wrapper stops being a tax play; only higher and additional-rate savers keep a gap, at 42% and 47%.

The ISA changes are no longer a rumour: the Treasury's factsheet sets them out and the regulations are due this autumn. From 6 April 2027 the cash ISA limit is £12,000 for under-65s (65+ keep £20,000), cash held inside a stocks & shares ISA loses 22% of its interest, and under-65s can't transfer from a stocks & shares ISA into a cash ISA. On £8,000 of cash parked in a stocks & shares ISA at 4%, that charge is about £70 a year.