Last Chance for Cash ISA as New Tax Year Brings Big Changes
Last Chance for Cash ISA as New Tax Year Brings Big Changes
Savers are urged to max ISA allowances this year before 2027 shifts cash vs. investments for under-65s, with over-65s keeping full cash limits.
With the new tax year starting on 6 April, UK savers are being urged to make the most of their ISA allowances before a planned reshuffle of limits. This year, adults under 65 can still use up to £20,000 in total across all ISAs, but from 6 April 2027 the cash allowance for under-65s will drop to £12,000 and the remaining £8,000 can be directed to stocks and shares. Those aged 65 and over will keep the full £20,000 cash ISA limit.
Leeds Building Society notes that this may be the last year the cash ISA wrapper sits at £20,000 for everyone. The aim is to encourage more people to invest by offering a higher wrapper on other ISAs, while cash savings stay essential for stability.
In a survey, people cited why they value cash ISAs: around 49% value the accessibility, 46% the predictable returns and 45% the simplicity, all helping reduce financial stress in uncertain times.
Experts suggest reviewing finances now and planning how to allocate the current year’s allowance. If you are under 65 and rely on cash for emergencies or short-term goals, you may want to use the cash portion up to £12,000 while considering transferring the rest into a stocks and shares ISA if it fits your risk tolerance and goals.
Bottom line: the start of the tax year is a good moment to revisit your savings strategy and talk to a financial adviser about whether the new rules justify adjusting your ISA mix.
