⏰ Deadline: 5 April 2027
The 2026/27 ISA allowance expires at midnight on 5 April 2027. Any unused allowance is permanently lost — you cannot carry it forward. For cash savers under 65: this is your last opportunity to contribute the full £20,000 to a Cash ISA before the new £12,000 cap takes effect.
ISA Allowances 2026/27: Complete Table
| ISA Type | 2026/27 Limit | Changes from 2027/28 |
|---|---|---|
| Cash ISA (under 65) | £20,000 (part of £20k) | Drops to £12,000 for under-65s from 6 Apr 2027 |
| Cash ISA (65 and over) | £20,000 (part of £20k) | Unchanged — full £20,000 retained |
| Stocks & Shares ISA | £20,000 (part of £20k) | Unchanged — still £20,000 |
| Lifetime ISA (LISA) | £4,000 (part of £20k) | Consultation on new First Home product ongoing |
| Innovative Finance ISA | £20,000 (part of £20k) | Unchanged |
| Junior ISA (per child) | £9,000 (separate) | Unchanged — separate from adult £20k |
| Overall adult ISA limit | £20,000 | Frozen until April 2031 |
The £20,000 total is shared across all ISA types (except Junior ISA). The Lifetime ISA has a £4,000 sub-limit that counts within your £20,000 total. You can now split across multiple ISAs of the same type in the same tax year.
ISA Types Explained
💰 Cash ISA
Tax-free savings account. Works like a standard savings account but all interest earned is completely free from income tax. Best for emergency funds, short-term savings, or risk-averse savers. Rates typically track the Bank of England base rate.
📈 Stocks & Shares ISA
Invest in shares, funds, bonds, or ETFs inside a tax-free wrapper. No capital gains tax or dividend tax on growth. Historically returns 6–8%/year over long periods. Capital at risk — you could get back less than invested.
🏠 Lifetime ISA (LISA)
For first-time buyers or retirement. Deposit up to £4,000/year and get a 25% government bonus (up to £1,000/year). Open between ages 18–39. Use for a first home purchase (up to £450k) or after age 60. Strict 25% withdrawal penalty otherwise. Consultation ongoing for replacement product.
👶 Junior ISA
Separate £9,000/year allowance per child. Available as Cash or Stocks & Shares. Child can't access until age 18. No tax on interest, dividends or gains. An excellent long-term gift that doesn't affect your own £20,000 allowance.
The April 2027 Cash ISA Cap: What You Must Know
The Autumn 2025 Budget confirmed the most significant ISA rule change since 2017: from 6 April 2027, savers aged under 65 will be capped at £12,000 per year in a Cash ISA. The total £20,000 ISA allowance remains — the remaining £8,000 must go into investment ISAs (Stocks & Shares, Innovative Finance, or Lifetime ISA).
Allowance structure from 6 April 2027 (under 65)
Existing cash ISA balances already saved before April 2027 are not affected — your historical savings retain their tax-free status regardless of the new cap. Only new contributions from April 2027 are subject to the reduced limit.
Why ISAs Are More Valuable in 2026/27 Than Ever
Three simultaneous changes have dramatically increased the value of ISA protection:
- Income tax threshold freeze until 2031: More people are being pushed into higher tax bands as wages rise, increasing the marginal rate on interest and dividends earned outside an ISA.
- Dividend tax rise from April 2026: The basic rate of dividend tax rises from 8.75% to 10.75%, and the higher rate from 33.75% to 35.75%. Sheltering dividend-paying shares in an ISA saves substantially more tax than before.
- Savings tax rise from April 2027: From next year, savings interest tax rates rise by 2 percentage points — 22% (basic), 42% (higher), 47% (additional). Locking cash into an ISA now provides permanent protection.
- £3,000 CGT annual exempt amount: The Capital Gains Tax annual exempt amount has been cut to just £3,000. For investors with gains above this, a Stocks & Shares ISA is now the most efficient wrapper available.
Key ISA Rules for 2026/27
- Multiple ISAs of the same type allowed: From 2024/25, you can contribute to multiple Cash ISAs across different providers in the same tax year — no need to pick just one.
- Partial transfers: You can now transfer part of your current-year ISA contributions to another provider, not just previous-year balances.
- Never withdraw to move — always transfer: If you withdraw ISA cash to a current account and then deposit elsewhere, you permanently lose the tax-free status. Always use an official ISA Transfer.
- Use it or lose it: The £20,000 allowance expires at midnight on 5 April 2027. Unused portions cannot be carried forward.
Strategy: What to Do Before April 2027
If you are under 65 and prioritise cash savings:
- Maximise your cash ISA contribution this year — up to £20,000 before 5 April 2027. This is the last year you can shelter the full £20,000 in cash.
- Fix rates where possible — many providers offer competitive fixed-rate Cash ISAs through April 2027 deadline.
- For any amounts above the future £12,000 cap, begin researching Stocks & Shares ISAs so you're prepared for the new structure from April 2027.
If you're an investor:
- With dividend tax now at 10.75%/35.75%, sheltering dividend-paying equities in a Stocks & Shares ISA is significantly more valuable than before — especially for higher-rate taxpayers.
- The full £20,000 Stocks & Shares ISA limit is unchanged and is completely unaffected by the cash cap change.
Couples: Up to £40,000 Tax-Free Per Year
ISA allowances are individual — each UK adult has their own independent £20,000 limit. A couple both using their full ISA allowance can shelter a combined £40,000 per year completely tax-free. Over 10 years, that's £400,000 of contributions growing entirely free from income tax and capital gains tax.
ISA allowances cannot be transferred between spouses (unlike unused pension Annual Allowance under some HMRC rules). Each partner must contribute directly to their own ISA.
Junior ISA: £9,000 Separately, Unchanged
The Junior ISA limit remains at £9,000 per child per year and is completely separate from — does not count toward — the adult £20,000 allowance. A family with two children and two adults can shelter up to £58,000 per year across all ISA wrappers combined.
Junior ISAs come in Cash and Stocks & Shares versions. The money cannot be accessed until the child turns 18, at which point it automatically becomes an adult ISA in their name.
Sources
HM Treasury Autumn Budget 2025 · HMRC ISA statistics · GOV.UK: Individual Savings Accounts · MoneySavingExpert (Martin Lewis, Nov 2025) · Taxyz.co.uk ISA Allowances 2026/27 · Moneyfarm.com Cash ISA Changes. For guidance only — not financial advice. Capital at risk when investing.