Cash ISA Cut 2027: HMRC Closes the Workarounds

From 6 April 2027 the annual cash ISA allowance for under-65s falls from £20,000 to £12,000. Anyone aged 65 and over keeps the full £20,000.

HMRC plans to tax interest earned on cash held inside a stocks and shares ISA, block transfers from S&S ISAs into cash ISAs, and police what counts as "cash-like" inside an investment ISA.

Taken together, the reforms make tax-efficient holding of safe assets harder for working-age households while leaving the £20,000 stocks and shares allowance untouched. That direction of travel is the real story.

The draft rules are still in consultation. If you currently hold meaningful cash inside a stocks and shares ISA, you have until April 2027 to plan a response.