From April 2027, the annual Cash ISA limit for under-65s will be cut from £20,000 to £12,000, while the overall £20,000 ISA allowance across all ISA types will remain unchanged. The reforms, introduced by former Chancellor Rachel Reeves, mark the biggest change to ISAs since they were first launched.
A new report from Raisin UK's Great British Savings Report 2026 reveals that only 18% of UK adults fully understand how Cash ISAs work, including the new limits. Despite this, almost half (44%) of current Cash ISA users say they are likely to start or increase their use of a Stocks and Shares ISA following the change.
Generational divide in savings behaviour
The shift is expected to affect younger and older savers differently. Two-thirds (66%) of 25–34-year-old Cash ISA users say they are likely to move towards Stocks and Shares ISAs, compared with just 27% of those aged 55 and over.
Kevin Mountford, personal finance expert and co-founder of Raisin UK, said: "The priority before April 2027 should be clarity. Savers need to understand what the new limit means, what options remain available to them and the trade-offs between cash and investing before deciding how to use their allowance."
Additional restrictions on ISA transfers
From April 2027, new rules will also limit how under-65s can move money between different ISA types. Cash held inside non-Cash ISAs will face a 22% tax charge on interest earned.
