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Budget Impact on ISAs

In the Autumn Budget the Chancellor announced that for those aged under 65 the Cash ISA limit would reduce to £12,000 with effect from 6 April 2027. How this is likely to work in practice is still under review. But the government has already indicated that this change to cash ISAs will also impact stocks and shares ISAs; at least for those aged under 65.

In a bid to cut off possible ways of circumventing the new lower cash ISA limit, the government has announced that with effect from April 2027 transfers from stocks and shares and innovative finance ISAs to cash ISAs will be blocked. In addition, any interest paid on cash held in non-cash ISAs will also be subject to a charge. Finally, cash held in non-cash ISAs will also be subject to a test to determine if it is part of an eligible stocks and shares investment or should be viewed as cash.

It should be stressed that all these measures apply to those investors aged under 65. As this will effectively create a two-tier system for ISAs our investment team will be keeping a close eye on developments; including the way in which investment houses intend to restructure their systems to meet the new regulations.

If you are looking for advice on investments or if your situation has changed and you may therefore need to review your existing pensions or investments, contact Beckworth by using one of the links on our website.