The following is a summary of all the Individual Savings Allowance (ISA) announcements in the Budget on 26 November 2025.

Annual subscription limits

The main news is that the government announced that:

  • the ISA annual subscription limit will remain at £20,000 until April 2031
  • junior Individual Savings Accounts (ISAs) and Child Trust Funds will remain unchanged at £9,000 until April 2031
  • lifetime ISAs will remain unchanged at £4,000 until April 2031

Cash ISA limit

The government will make the following changes to ISAs from 6 April 2027:

  • the annual subscription limit for a cash ISA will be set at £12,000 for investors under the age of 65
  • for investors aged 65 and over the annual subscription limit for a cash ISA will remain at £20,000

The following rules will be introduced to avoid circumvention of the lower limit for cash ISAs:

  • no transfers from stocks and shares and Innovative Finance ISAs to cash ISAs
  • tests to determine whether an investment is eligible to be held in a stocks and shares ISA or is 'cash like'
  • a charge on any interest paid on cash held in a stocks and shares or Innovative Finance ISA

These rules will apply to investors under the age of 65.

Industry will be consulted on the draft legislation, which will be made by amendments to the ISA regulations, and laid before Parliament well ahead of April 2027.

Savings rates

In addition, with effect from 6 April 2027 the rates of Income Tax applicable to savings income will increase by 2% at each band. From tax year 2027 to 2028, the savings:

  • basic rate will be increased to 22%
  • higher rate will be increased to 42%
  • additional rate will be increased to 47%

The starting rate for savings and the Personal Savings Allowance remain unchanged.

StockbrokerCompare comment:

While the Budget outlines tighter rules around cash within ISAs, investors should be careful not to react too early. The proposed charge on any interest paid on cash held within a Stocks & Shares ISA or Innovative Finance ISA will not be introduced until April 2027.

Until then, uninvested cash held within these ISAs continues to benefit from full tax protection, making it important for investors to maximise the interest earned on cash balances. This is particularly relevant given the wide differences in cash interest rates paid by investment platforms, with some paying little or no interest at all.

Although the government plans to introduce tests to determine whether investments are genuinely eligible for a Stocks & Shares ISA or are 'cash-like', the detail has yet to be finalised and will be consulted on ahead of implementation.

With April 2027 still some way off, investors should focus on ensuring their platform is paying competitive interest on uninvested cash. You can see how much interest your broker pays — and what you could be earning elsewhere — using the StockbrokerCompare Cash Interest Calculator:

https://www.stockbrokercompare.co.uk/cash-interest-calculator