The ISA allowance: how it works and how to use it

The biggest change in years is coming to ISAs from 6 April 2027: the cash ISA allowance is being cut to £12,000 if you’re under age 65. The cash ISA allowance will remain at £20,000 if you’re over 65. The new cash ISA contortions have a knock-on effect upon the stocks and shares ISA, too. HMRC has drawn up the so-called anti-circumvention rules to prevent people from treating their stocks and shares ISAs as proxy cash accounts. Perhaps it would be better to treat people like adults and allow them to make up their own minds about the best way to use their savings? Be that as it may, we’ll summarise the 6 April 2027 changes here, and then look at making the most of your ISA allowance with the rules as they stand in the tax year 6 April 2026 to 5 April 2027. 6 April 2027 ISA rule changes The cash ISA allowance will be £12,000 if you’re under 65. The cash ISA allowance will be £20,000 if you’re over 65, or turn 65 in the current tax year. Under-65s won’t be allowed to transfer a non-cash…