ISA Allowance 2026/27 and the £12,000 Cash ISA Limit from April 2027

An Individual Savings Account (ISA) lets you save or invest without paying tax on the interest, dividends or gains. For 2026/27 the overall allowance is £20,000. From April 2027 the government is changing how much of it can go into cash.

The 2026/27 allowance

You can pay up to £20,000 into ISAs between 6 April 2026 and 5 April 2027, split however you like across:

• Cash ISAs: savings accounts with tax-free interest
• Stocks and shares ISAs: investments in funds, shares and bonds
• Innovative finance ISAs: peer-to-peer lending (higher risk)
• Lifetime ISA: up to £4,000 a year for 18–39 year olds, with a 25% government bonus, for a first home or retirement

The Junior ISA allowance for children is a separate £9,000.

Unused allowance doesn’t roll over. If you don’t use it by 5 April, it’s gone.

The April 2027 cash ISA change

From 6 April 2027, savers under 65 will be able to put at most £12,000 a year into cash ISAs. The other £8,000 of the £20,000 allowance can still go into stocks and shares (or other non-cash) ISAs. Savers aged 65 and over keep the full £20,000 for cash.

If you want to keep a large amount in cash ISAs, 2026/27 is the last year you can put the full £20,000 in cash (if you’re under 65).

Is an ISA worth it if I’m under the Personal Savings Allowance?

Outside an ISA, the Personal Savings Allowance makes some interest tax-free:

Your tax band	Tax-free interest a year
Basic rate	£1,000
Higher rate	£500
Additional rate	£0

With savings rates around 4–5%, a basic-rate taxpayer can hold about £20,000–£25,000 before using up the allowance. For higher-rate taxpayers it’s about £10,000–£12,000. And ISA money stays tax-free forever, while the PSA depends on each year’s interest and your future tax band. From April 2027, tax on savings income above the allowance rises to 22%, 42% and 47%.

The difference over 10 years

£20,000 at 4.5% for 10 years grows to £31,059 in an ISA. In a taxed account for a higher-rate taxpayer (40% on all interest), it reaches £26,106. The ISA keeps £4,954 more.

Flexible ISAs and transfers

• A flexible cash ISA lets you withdraw and replace money in the same tax year without using more allowance.
• You can transfer existing ISAs between providers without affecting your allowance. Always use the provider’s transfer process, never withdraw and re-deposit.
• Since April 2024 you can pay into more than one ISA of the same type in a year, as long as the total stays within £20,000.

Clearing expensive debt first usually beats saving: see debt avalanche vs snowball. If you have a mortgage, compare saving with overpaying it.

Plan your savings

Use the savings calculator to compare an ISA with a taxed account, see how regular saving grows, and work out the monthly amount needed to hit a target. It warns you if your planned saving goes over the ISA allowance.