Cash ISA and tax-free limit changes confirmed — what you need to know
Rachel Reeves announces cash ISA limit cut - Rachel Reeves has announced reforms to the ISA system, effective from April 2027, maintaining the overall £20,000 annual allowance.
- Under the new rules, £8,000 of the allowance must be invested in stocks and shares, effectively capping the cash ISA allowance at £12,000.
- Following criticism, individuals aged over 65 will be exempt from this change and will retain the full £20,000 allowance for cash ISAs.
- The change is expected to impact a significant number of savers, as over 40% of current cash ISA users deposit more than £12,000 annually.
- The reform aims to encourage investment while acknowledging the needs of older savers who may prefer lower-risk cash assets.
