The UK Cash ISA annual allowance will drop from £20,000 to £12,000 for under-65s from 6 April 2027. The 2026/27 tax year ending 5 April 2027 is your last chance to use the full £20,000 allowance. Over-65s keep the £20,000 allowance.
What's Changing
The government announced significant changes to the Cash ISA allowance starting from the 2027/28 tax year. Here is a summary of what stays the same and what changes.
Cash ISA limit for all adults
Cash ISA limit for under 65s
Adults under 65 at start of tax year
Allowance stays at £20,000/year
| Product | 2026/27 | 2027/28 | Change |
|---|---|---|---|
| Cash ISA (under 65) | £20,000 | £12,000 | −£8,000 |
| Cash ISA (65+) | £20,000 | £20,000 | No change |
| Stocks & Shares ISA | £20,000 | £20,000 | No change |
| Lifetime ISA | £4,000 | £4,000 | No change |
The overall ISA allowance is £20,000 across all ISA types. The LISA £4,000 limit sits within this total. From 2027/28, under-65s can only put £12,000 of that into Cash ISAs but can still allocate the full £20,000 to a Stocks & Shares ISA.
How Much Could You Lose?
Use this calculator to see how the reduced Cash ISA allowance affects your savings over time. Enter how much you currently save per year into a Cash ISA.
What Should You Do Now?
With the Cash ISA allowance dropping from April 2027, here are five steps to make the most of your remaining time.
Max out your 2026/27 ISA allowance before 5 April 2027
You have until midnight on 5 April 2027 to deposit up to £20,000 into your Cash ISA for the current tax year. Any unused allowance is lost forever — it does not roll over. If you cannot deposit the full amount, contribute as much as you can afford.
Consider a Stocks & Shares ISA for the remaining £8,000
From 2027/28, the Stocks & Shares ISA retains its £20,000 allowance. If you were saving more than £12,000 per year in cash, consider putting the excess into a Stocks & Shares ISA. This keeps your savings tax-free, though your capital is at risk.
Look at a Lifetime ISA if you qualify
If you are under 40 and saving for your first home or retirement, a Lifetime ISA offers a 25% government bonus on up to £4,000 per year (£1,000 free). The LISA limit is unchanged and sits within your overall ISA allowance.
Check your existing Cash ISA rate and switch if needed
Many savers are stuck on low-interest Cash ISAs from years ago. With the allowance shrinking, every pound in your ISA needs to work harder. Compare rates and transfer to the best available — ISA transfers preserve your tax-free status.
Set up a standing order to drip-feed monthly
Rather than trying to find a lump sum, spread your contributions across the year. £20,000 divided by 12 is £1,667 per month. Even £500 or £1,000 per month adds up significantly over the remaining tax year. Automating the transfer removes the temptation to skip a month.
ISA Comparison Table
Here is how the four main ISA types compare for the current and upcoming tax years.
| Type | 2026/27 Limit | 2027/28 Limit | Best For |
|---|---|---|---|
| Cash ISA | £20,000 | £12,000 (under 65) | Short-term savings |
| Stocks & Shares ISA | £20,000 | £20,000 | Long-term investing |
| Lifetime ISA | £4,000 | £4,000 | First home / retirement |
| Junior ISA | £9,000 | £9,000 | Children |
The overall ISA wrapper remains £20,000. You can split this across Cash, Stocks & Shares, and Innovative Finance ISAs (with up to £4,000 in a LISA). The Junior ISA has its own separate £9,000 allowance and does not count toward the adult limit.
Track Your ISA in earmarkIQ
earmarkIQ connects to your bank account and automatically tracks your ISA contributions, shows your remaining allowance, and alerts you when you're approaching the limit.
Download earmarkIQ Free →iOS · Free tier available · FCA regulated · Open Banking
Frequently Asked Questions
This page provides general financial information only. It is not financial advice. Tax rules can change. Written by Caolan Preston, CF30-qualified financial professional. Always check current HMRC guidance.
About earmarkIQ
earmarkIQ is a UK personal finance app launching on iOS in May 2026. It is an FCA Appointed Representative of Finexer Ltd (FRN 925695) and ICO registered (CSN2001882). earmarkIQ provides Open Banking account aggregation across 50+ UK banks via Finexer, AI-powered salary allocation, Payment Initiation Services (PIS), subscription price creep detection, capital gains tracking, salary sacrifice optimisation, marriage allowance detection, and a financial product marketplace. The AI financial advisor, Ask IQ, is powered by Claude (Anthropic). Subscription tiers: Free (£0), Plus (£4.99/mo), Pro (£9.99/mo), Unlimited (£14.99/mo). Website: earmarkiq.app