Overview
- The new cash ISA cap applies from 6 April 2027, affects only new contributions, and exempts over‑65s who retain a £20,000 cash limit.
- The Government will designate £8,000 of the £20,000 annual ISA allowance for investment products, with the overall ISA ceiling unchanged.
- From April 2027, tax on savings interest will rise to 22% for basic‑rate taxpayers, 42% for higher‑rate, and 47% for additional‑rate.
- Industry bodies and consumer experts warn the cut may not boost investing, could push savers into taxable accounts, and may reduce deposit funding for lenders, risking pressure on mortgage costs.
- Cash ISAs remain the most used ISA type, with nearly 10 million subscriptions in 2023/24, highlighting the wide impact of the reform.