Individual Savings Accounts
The question
To ask the Chancellor of the Exchequer, what plans she has to levy a penalty on holding cash in a Stocks and Shares ISA.
Answered by Rachel Blake
From April 2027, the Cash ISA annual limit will be reduced to £12,000 while the limit for Stocks and Shares and Innovative Finance ISA (non-Cash ISAs) will remain at £20,000. The Cash ISA limit for those aged 65 and over will remain at £20,000.
To support this change, a number of rules will be introduced to ensure the policy achieves its objective of encouraging retail investment and supporting better returns for savers. The new rules will minimise the opportunity for the lower Cash ISA limit to be circumvented, while preserving the flexibility needed for legitimate investment activity within non-Cash ISAs. A flat rate charge of 22% will apply from April 2027 to any interest or alternative finance return paid on cash held within a non-Cash ISA to discourage long-term cash holdings. Further details of the changes are in the ISA reform 2027 published factsheet:
ISA reform 2027: anti-circumvention rules factsheet - GOV.UK
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