Martin Lewis has confirmed the new Cash ISA rules for those who are set to turn 65. In the latest Budget, Chancellor Rachel Reeves announced long-rumoured changes to Cash ISA limits would be put in place from April 2027.
The changes would cut the limit on annual Cash ISA deposits down to just £12,000, but only for those aged under 65. The move is intended to encourage more savers to invest their money rather than leave it sat in cash, which often yields lower average returns over the long term than investing.
Protection for Over-65s
However, following pressure by the likes of Martin Lewis, the Chancellor implemented a protection for those aged over 65, who may not want to leave their money sat in investments for years when they need it for retirement. Ms Reeves announced that those aged 65 and over would be able to keep their full £20,000 Cash ISA limit for deposits each year.
Now, Martin has confirmed how this will work in practice for those who are set to turn 65. He explained to his X followers that for the purposes of tax, those who are aged 64 will still get to keep their £20,000 Cash ISA limit if they turn 65 in the same tax year.
Tax Year Definition
The tax year runs from April 6 to April 5 and the new Cash ISA rules come into force from April 6, 2027. Those who turn 65 between April 6, 2027 and April 5, 2028 would still be able to keep their £20,000 Cash ISA limit, even if they don’t turn 65 until April 5, 2028.
Martin explained: “We now know the definition of 'age 65' for the cash ISA limit. From April 2027, the cash ISA limit will be cut to £12,000 for all under 65s, though the total ISA limit remains £20,000. We now know you get the higher cash ISA limit from the tax year in which you turn 65. Rather than on your 65th birthday.”
HMRC Confirmation
HMRC said in a fact sheet published last week: “At Autumn Budget 2025, it was announced that from April 2027, the Cash ISA allowance would be reduced to £12,000 while the limit for Stocks and Shares and Innovative Finances ISA (non Cash ISAs) would remain at £20,000. The Cash ISA allowance for those aged 65 and over would remain at £20,000. To support this change, a number of rules will be introduced to ensure the policy achieves its objective of encouraging retail investment and supporting better returns for savers. The new rules will minimise the opportunity for the lower Cash ISA limit to be circumvented, while preserving the flexibility needed for legitimate investment activity within non Cash ISAs.”
