New cash ISA rules for 2027

18 July 2026 ISAs are getting more complicated - here’s what is changing. The government wants to encourage retail investors to invest in growth rather than just save cash 1. So it is changing some of the rules. Cash ISA limit reduced to 12k, and you’ll pay tax on interest in non Cash ISAs Here’s a quick summary: The overall ISA contribution limits of £20,000/year for over 18s aren’t changing. But if you’re under 65, the Cash ISA will be limited to £12,000 per year. If you’re 65 or older 2, it stays at £20,000. (For the non Cash ISAs, the limits stay at £20,000 for Stocks and Shares ISAs, Innovative Finance ISAs, and LISAs, and £9,000 for Junior ISA.) If you hold cash in any non Cash ISA, you’ll pay tax of 22% (!) on any interest the cash earns you. That tax is only on the interest, not on the value of the cash or other assets in your ISA. However you can still hold “cash like” assets like money market funds in your stocks and shares ISA, as long as the value of the portfolio held in…