The cash ISA allowance in the UK will be reduced to £12,000 per year for people under 65 from April 2027, the UK government confirmed in its Autumn Budget today.
Speaking during her Budget today, chancellor Rachel Reeves said: “From April 2027, I will reform our ISA system, I will retain the £20,000 allowance, designating £8,000 of it exclusively for investment.”
Those over 65 will retain the full £20,000 limit for cash ISAs per year.
It is one of a package of measures aimed at nudging more British savers to invest some of their money into stocks and shares ISAs instead of hoarding it in cash to boost the UK economy.
Sarah Coles, head of personal finance of Hargreaves Lansdown: “We need an investment culture in the UK. The chancellor’s calculation that investing instead of saving in an ISA could have left you £50,000 better off demonstrates the huge growth potential offered by investment.
“However, it remains to be seen whether the cut to the cash ISA will have the impact the Treasury is hoping for. The fact this change isn’t happening overnight does give people time to take advantage of their cash ISA allowance ahead of April 2027.”
