The allowance has not changed, and will not next year
The ISA allowance is £20,000 for 2026/27. It has been £20,000 since 2017/18 and it is now frozen until 5 April 2031.
Nine years at the same cash figure, through a period of significant inflation, is a real terms cut of roughly a third. The allowance looks static and is quietly shrinking.
The Lifetime ISA limit stays at £4,000, which counts within your £20,000, and the Junior ISA limit stays at £9,000, which does not.
What is actually changing, and when
Here is where most coverage gets it wrong, so be careful what you act on.
From April 2027, not now, the amount you can put into a cash ISA is expected to be capped at £12,000 within the overall £20,000. The remaining £8,000 would still be available, but only into stocks and shares. Savers aged 65 and over are expected to keep the full £20,000 in cash.
Two things to hold onto. The £20,000 total allowance is not changing. And this is coming through secondary legislation rather than the Finance Bill, so the detail can still move. Anyone telling you your cash ISA is capped today is wrong.
Why the shelter is worth more than it was
The case for using an ISA has strengthened considerably, and not because ISAs improved. It is because everything outside them got worse.
The dividend allowance fell to £500, and dividend rates rose in April 2026. The capital gains annual exempt amount fell to £3,000. Income tax thresholds are frozen to 2031, dragging more people into higher rates. Inside an ISA, none of that applies. No tax on dividends, no capital gains tax, nothing to report on a tax return.
Ten years ago, with a £12,300 capital gains allowance and a £5,000 dividend allowance, a modest portfolio outside an ISA was often perfectly efficient. That is no longer true, and it changed faster than most people noticed.
What to do about it
Use the allowance before 5 April. It does not carry forward. An unused year is gone permanently, and with the allowance frozen, that lost capacity does not come back.
Both spouses have their own £20,000. A couple can shelter £40,000 a year, and that is the simplest planning available to most households.
If you are holding significant cash outside an ISA and paying tax on the interest, look at the personal savings allowance position too, because higher rate taxpayers only get £500 of it and additional rate taxpayers get nothing.
Common questions
Can I pay into more than one ISA?
Since April 2024 you can pay into more than one of the same type in a tax year, as long as you stay within the £20,000 overall.
Should I move my cash ISA before April 2027?
Do not act on an announcement that has not been legislated yet, and do not make an investment decision on the basis of a tax rule. Whether cash or shares suits you depends on your timescale and your appetite for risk, not on the ISA rules.
We are accountants rather than financial advisers, so we can tell you how ISAs are treated for tax but we cannot tell you what to invest in. Figures reflect guidance as at July 2026. The April 2027 change is announced but not yet in force.