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Cash ISA Limit 2027 Planner UK

From 6 April 2027 the cash ISA limit falls to £12,000 a year for under-65s (65+ keep £20,000; the overall £20,000 ISA allowance is unchanged). At the same time, tax on savings interest outside an ISA rises two points. This planner shows your new cap, how much of your saving stops fitting, and exactly what that overflow costs in tax if you do nothing — plus what the ISA rules allow for it.

The April 2027 cash ISA limits and the charge on cash held in a stocks & shares ISA verified against HM Treasury, September 2026.

Your cash ISA situation
All inputs in £ unless marked. Updates as you type.
£
%
£
Your cash ISA cap from April 2027
£12,000
Under 65 · overall £20k allowance unchanged
Yearly overflow — no longer fits in cash
£4,000
Needs a new home from 2027/28
First-year tax if left outside
£0
At 2027 savings rates, after your PSA
Total tax over the projection
£0
Overflow compounding in taxable savings
£4,000 a year stops fitting.
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ⓘ Uses the announced April 2027 rules: cash ISA subscriptions capped at £12,000 for under-65s (£20,000 at 65+), overall ISA allowance unchanged at £20,000, and savings income tax at 22% / 42% / 47% by band from 6 April 2027 (2pts above today), net of the Personal Savings Allowance (£1,000 / £500 / £0). Assumes your other income already covers the personal allowance and starting rate for savings. A planning aid, not personal tax advice.
✦ The full picture

What's changing with the cash ISA in April 2027?

Since 2017 the ISA allowance has been a simple, generous £20,000 a year, and you could put every pound of it into cash. From 6 April 2027 that changes for anyone under 65: new cash ISA subscriptions are capped at £12,000 a year. Savers aged 65 or over keep the full £20,000 cash allowance — the government's concession to retirees who hold cash for income rather than inertia.

The cap doesn’t bite until April 2027, and there’s one fiscal event in between: the Autumn Budget on 28 October 2026. If the number moves again, that’s where it moves.

Two things did not change, and they matter just as much. The overall £20,000 allowance survives intact — the other £8,000 can still be sheltered, it just can't be in a cash ISA. And existing balances are untouched: money already inside cash ISAs stays wrapped, keeps compounding tax-free, and can still be transferred between cash ISA providers. The one new transfer limit: from 6 April 2027, under-65s can't move money from a stocks & shares (or other non-cash) ISA into a cash ISA; transfers the other way are still allowed.

The double hit: the cap lands as savings tax rises

The same Budget raised tax on savings interest by two percentage points from April 2027 — to 22% basic, 42% higher and 47% additional rate. So the cash squeezed out of the wrapper lands in a taxable account at exactly the moment the tax on it goes up. A higher-rate taxpayer's overflow doesn't just lose its wrapper; the unwrapped interest is taxed at 42% instead of today's 40%. The nudge toward investing is really a shove.

What changes, and what the rules allow

2026/27 is the last full £20,000 cash year. The current tax year — ending 5 April 2027 — is the last one where under-65s can put the whole £20,000 into cash ISAs: up to £8,000 more than next year's rules allow.

The overflow can still be wrapped, within limits. The £8,000 that no longer fits in cash can still go into a stocks & shares ISA, which is a wrapper, not an obligation to buy shares. But from 6 April 2027, interest on cash held inside a non-cash ISA carries a 22% flat-rate charge, and money market funds count as cash-like: they can make up part of a stocks & shares ISA, not all of it. Money in a stocks & shares ISA also can't later be transferred into a cash ISA unless you're 65 or over. Our compound interest calculator shows what investing over the long term can look like.

Outside ISAs, the PSA comes first. If overflow does end up in ordinary savings, the Personal Savings Allowance (£1,000 basic / £500 higher / £0 additional) absorbs the first slice of interest — but it's frozen, unchanged since 2016, and interest on cash you already hold outside ISAs uses it up first. The calculator above nets all of this off for your numbers.

A worked example

Take a 45-year-old higher-rate taxpayer saving £16,000 a year into cash ISAs at 4.25%. From April 2027 only £12,000 fits — £4,000 a year overflows. Left in ordinary savings, year one's £4,000 earns £170 of interest, inside the £500 PSA — tax £0. But the pile grows: by year five there's £20,000+ outside earning £900+, and the PSA is exhausted; by year ten the running total handed to HMRC is in the four figures. The same £4,000 could go into a stocks & shares ISA within the same overall £20,000 allowance, where investment returns aren't taxed but interest on cash held in it carries the 22% charge. More detail, including why 2026/27 is the year that matters, is in what to do before April 2027.

Methodology

The planner applies your age to set the 2027 cap (£12,000 under 65, £20,000 at 65+), takes your stated yearly cash-ISA saving (capped at the £20,000 overall allowance), and computes the annual overflow. The do-nothing projection adds each year's overflow to a taxable savings pot (seeded with any non-ISA savings you already hold), credits interest at your rate, deducts your Personal Savings Allowance, taxes the remainder at the post-April-2027 savings rate for your band, and compounds the pot net of tax. It assumes flat rates and thresholds over the projection, that your other income uses the personal allowance and starting rate for savings, and that the PSA is applied to this pot's interest in full.

✦ Questions

Cash ISA changes 2027 — FAQ

What is the cash ISA limit from April 2027?
From 6 April 2027, cash ISA subscriptions are capped at £12,000 a year for under-65s. Savers aged 65 or over keep the full £20,000. The overall ISA allowance is unchanged at £20,000 — the rest can go into non-cash ISAs. Announced in the Autumn 2025 Budget.
Can I still put £20,000 a year into ISAs after April 2027?
Yes — only the split changes. Under-65s can put at most £12,000 into cash; the remaining £8,000 must go into non-cash ISAs (e.g. stocks & shares) to stay wrapped. From 6 April 2027, interest on cash held inside a non-cash ISA carries a 22% flat-rate charge, and money market funds count as cash-like: they can be part of a stocks & shares ISA, but an ISA held entirely in them doesn't qualify. Transfers from a stocks & shares ISA into a cash ISA won't be allowed for under-65s.
Does the change affect money already in my cash ISA?
No. The cap applies to new subscriptions from 6 April 2027. Existing balances stay tax-free, keep earning tax-free interest, and can still be transferred between cash ISA providers under the normal ISA transfer rules. One new limit: from 6 April 2027, under-65s can't transfer money from a stocks & shares ISA into a cash ISA (transfers from cash into stocks & shares are still allowed).
Why is the government cutting the cash ISA allowance?
The stated aim is nudging long-term savings toward investment. The nudge has teeth because savings tax rises two points at the same moment — 22% / 42% / 47% from April 2027 — so unwrapped cash is taxed harder just as less of it fits in the wrapper.
What changes before and after April 2027?
The 2026/27 tax year — ending 5 April 2027 — is the last £20,000 cash ISA year for under-65s. From 6 April 2027, money above the £12,000 cash limit can go into a stocks & shares ISA (still wrapped, but interest on cash held there carries a 22% charge, money market funds can only be part of the holdings, and it can't later move into a cash ISA if you're under 65) or into taxable savings (PSA first, then tax at 22% / 42% / 47%). For moving unwrapped investments, our Bed-and-ISA calculator shows the numbers.
How much tax will I pay on interest outside an ISA from 2027?
Interest above your PSA (£1,000 basic / £500 higher / £0 additional) is taxed at the new savings rates: 22% / 42% / 47%. Example: £20,000 outside ISAs at 4.25% is £850 of interest; a higher-rate taxpayer pays 42% on £350 of it after the PSA — £147 a year, rising as the pot grows. The planner above compounds this over your chosen horizon.
Go deeper — WealthR Playbook
The UK ISA & Investing Playbook puts this in context — the full April 2027 cash-ISA cap and what to do about it, plus the £20k allowance, cash vs stocks & shares, and the Lifetime ISA. £19.99, or free with Pro →