Cash ISA Limit for Over-65s

From 6 April 2027, the amount you can pay into a cash ISA each year depends on your age. Savers aged 65 and over keep a £20,000 cash ISA limit. Savers under 65 will have that limit cut to £12,000, within an overall ISA allowance that stays at £20,000¹.

The change was announced at Budget 2025 and takes effect at the start of the 2027/28 tax year. The government says the higher limit for older savers recognises the need of those approaching retirement to restructure and reduce the risk in their investments, and it allows transfers into cash ISAs for that group².

If you are already 65 or over, nothing about your cash ISA limit changes. If you are approaching 65, the higher limit applies from the start of the tax year in which you turn 65, not from your birthday itself³.

Over-65s keep a £20,000 cash ISA limit

For anyone aged 65 or over, the annual cash ISA subscription limit stays at £20,000 per tax year from 6 April 2027¹. The government's stated reason is that people approaching retirement need to restructure and reduce the risk in their investments, and moving money into cash is part of that².

This is a change from the position in 2026/27, when everyone under 65 could also pay up to £20,000 into a cash ISA⁷. From April 2027 the two age groups diverge: the under-65 cash limit falls to £12,000, while the over-65 limit is untouched⁵.

The higher limit is not a separate allowance sitting on top of the overall ISA allowance. It is the cash portion of the same £20,000 overall limit. Someone aged 65 or over can put the whole £20,000 into cash if they wish, or split it between cash and other ISA types².

One point that catches people out: the £20,000 cash ISA limit for over-65s is a limit on what you can pay in during a tax year, not a cap on the total you can hold. Interest and growth on money already in the account do not count towards it.

How the cash limit changes for under-65s: £12,000

From 6 April 2027, the annual cash ISA subscription limit for individuals aged under 65 falls to £12,000⁴. The change is made by amending the Individual Savings Account Regulations 1998⁴. The draft legislation sets out that in any year in which a qualifying individual is 64 or under at the end of that year, the subscription limit for cash accounts is £12,000⁸.

The overall ISA allowance stays at £20,000, so an under-65 saver still has £20,000 of tax-free allowance in total. What changes is how much of it can go into cash. The remaining £8,000 can go into a stocks and shares ISA or an Innovative Finance ISA².

There is a wrinkle in how some providers describe this. One building society says that from 6 April 2027 those under 65 can pay in up to £8,000 of their £20,000 annual allowance into a cash ISA⁹. That figure does not match the government's £12,000 and appears to be an error in that provider's guidance. The official figure, repeated across government publications and legislation, is £12,000⁴.

For a saver who wants to hold more than £12,000 in tax-free cash from April 2027, the options are to use a stocks and shares ISA and hold cash within it, subject to the rules below, or to wait until the tax year in which they turn 65.

When the higher limit starts: the tax year you turn 65

The £20,000 cash ISA limit applies from the start of the tax year in which you turn 65³. It is not tied to your birthday. If you turn 65 in February, you have the higher limit from the previous 6 April, the beginning of that tax year.

This matters for planning. Someone who turns 65 in, say, September 2027 has the £20,000 cash ISA limit for the whole of the 2027/28 tax year, even though they were 64 when the tax year began. The rule is written around the tax year in which the individual turns 65, not the date of the birthday³.

The same start date governs the transfer rules. The restriction on moving money from a stocks and shares or Innovative Finance ISA into a cash ISA is lifted for those aged 65 and over from the start of the tax year in which they turn 65³.

For anyone who turns 65 in a later tax year, the higher limit and the transfer permission both begin at the start of that tax year, not partway through it.

Transfers from stocks and shares ISAs into cash ISAs

From 6 April 2027, transfers from non-cash ISAs into cash ISAs will not be permitted for those under 65³. This is an anti-circumvention rule: without it, an under-65 saver could sidestep the £12,000 cash limit by moving stocks and shares ISA money into a cash ISA³.

For savers aged 65 and over, the transfer restriction is disapplied from the start of the tax year in which they turn 65³. That means an over-65 saver can move money from a stocks and shares ISA or an Innovative Finance ISA into a cash ISA, and the government's stated rationale for the higher limit is exactly this: allowing those approaching retirement to restructure and reduce risk².

Transfers in the other direction remain possible for everyone. It stays possible to transfer from a cash ISA to a non-cash ISA⁶. The rules on what can be transferred where have a longer history: funds in a stocks and shares ISA can only be transferred to another stocks and shares ISA, while cash ISA funds can go to a stocks and shares ISA or another cash ISA¹⁰.

How the cash limit fits the overall £20,000 ISA allowance

The cash ISA limit sits inside the overall ISA allowance, which stays at £20,000 per tax year from 6 April 2027². The overall limit covers cash ISAs, stocks and shares ISAs and Innovative Finance ISAs together.

For an over-65 saver, the cash limit and the overall limit are the same number: £20,000. Every pound of the allowance can go into cash if that is what the saver wants¹.

For an under-65 saver from April 2027, the two limits diverge. The overall allowance is £20,000, but only £12,000 of it can go into a cash ISA⁴. The remaining £8,000 can go into a stocks and shares ISA or an Innovative Finance ISA, or be left unused.

There is a further rule for under-65s. From 6 April 2027, a charge applies to any interest paid on cash held in a stocks and shares or Innovative Finance ISA⁵. This is designed to stop savers holding large cash balances inside a non-cash ISA to get around the £12,000 cash limit. For savers aged 65 and over, that charge and the prohibition on 100 per cent cash-like investments remain in place¹.

The overall ISA allowance has been frozen at £20,000, and is set to remain at that level until 2030¹¹.

If you turn 65 partway through a tax year

The higher limit applies for the whole of the tax year in which you turn 65, not from your birthday onwards³. There is no part-year calculation and no need to wait until your birthday to use the £20,000 cash limit.

This is different from how some age-based allowances work elsewhere in the tax system, where entitlement begins on the birthday itself. For the cash ISA limit, the tax year is the unit of measurement.

If you are 64 at the start of a tax year and turn 65 during it, you have the £20,000 cash ISA limit for that entire tax year. If you are 64 throughout the tax year and do not turn 65 until the following one, you have the £12,000 limit for that year and the higher limit from the next 6 April.

Can a married couple aged over 65 each put £20,000 into cash ISAs?

Yes. Each person has their own ISA allowance, so two people aged 65 or over can each pay up to £20,000 into cash ISAs in the same tax year. Between them that is £40,000 of tax-free cash saving¹².

ISAs are individual accounts and cannot be held in joint names. But the effect for a couple is a shared £40,000 of ISA allowance, because each partner can use their own¹².

The same principle applies to the overall ISA allowance. A couple where both pay into ISAs can shelter £40,000 a year between them, whatever mix of cash, stocks and shares and Innovative Finance ISAs they use¹³.

Can I carry over unused cash ISA allowance to the next tax year?

No. Unused ISA allowance cannot be carried over into the next tax year, and your allowance resets every 6 April¹⁴. Whatever you do not pay in by the end of the tax year is lost.

This applies to the cash ISA limit and to the overall ISA allowance alike, whatever your age. There is no mechanism for banking unused allowance for later use.

The practical effect is that the tax year end is a deadline for using the allowance. Money you intend to pay in has to be in the account by the end of the tax year, and transfers between providers can take time, so leaving it to the last days carries a risk of missing the deadline.

Can I pay into more than one cash ISA in the same tax year?

Yes. There is no limit on the number of cash ISA accounts you can pay into in a single tax year¹⁵. The restriction is on the total amount, not the number of accounts.

You can split your allowance across as many cash ISAs as you like, as long as the combined payments stay within your limit. For an over-65 saver from April 2027, that limit is £20,000. For an under-65 saver, it is £12,000 for cash ISAs, within the £20,000 overall allowance⁴.

This is a change from the older rules. Until 2014, there was a requirement that a saver could invest no more than 50 per cent of the overall subscription limit in a cash account in any year. That restriction was abolished with effect from 1 July 2014¹⁶.

If I withdraw money from a flexible cash ISA, can I put it back without using up my allowance?

With a flexible cash ISA, money you withdraw and pay back in the same tax year does not count towards your annual ISA allowance¹⁸. The money must be paid back in the same tax year as the withdrawal, or you lose the ability to replace it¹⁸.

Not all cash ISAs are flexible. Whether an account is flexible is a term of the individual product, so it is worth checking the terms before relying on this. Where an account is flexible, the ability to replace withdrawals means you can use the account for money you may need to access without eating into your allowance.

For an over-65 saver with a £20,000 cash ISA limit, the flexibility matters less than for someone with a £12,000 limit, because the higher limit gives more room to pay money back in. But the same tax year deadline applies to replacing withdrawals.

Is interest on a cash ISA taxed?

Interest on money held in a cash ISA is tax free. That is the core feature of the account, and it applies whatever your age.

For savers aged 65 and over, a charge on interest earned on cash held in non-cash ISAs, and the prohibition on 100 per cent cash-like investments, remain in place¹. That means cash held inside a stocks and shares ISA or an Innovative Finance ISA does not get the same treatment as cash held in a cash ISA.

For under-65s, the position is different from 6 April 2027. A charge applies to any interest paid on cash held in a stocks and shares or Innovative Finance ISA⁵. This is part of the anti-circumvention rules that sit alongside the £12,000 cash limit.

Can the money I put into a cash ISA go down in value?

Money in a cash ISA does not fall in value in the way investments can, because it is held as cash rather than invested in shares or funds. The cash balance itself does not go down.

The value can be eroded by inflation, which reduces what the money will buy over time. That is a real risk for longer-term saving, and it is one reason the government gives for allowing over-65s to hold more in cash: the money is intended for spending in the nearer term, where inflation has less time to bite².

Stocks and shares ISAs are different. Their value can fall as well as rise, because they hold investments rather than cash. For anyone weighing up whether to hold cash or investments inside an ISA, the choice is between the certainty of a cash balance and the potential growth, and the potential loss, of investments.

Where to get help

Free, impartial guidance on ISAs and savings is available from MoneyHelper, the government-backed service. For anyone struggling with debt, debt advice charities offer free help, and the Financial Ombudsman Service can look at complaints about ISA providers that have not been resolved.

If you are unsure whether a cash ISA is right for your circumstances, the rules set out here are the starting point: what the limit is, when it applies, and what changes at 65. The decision itself depends on your own circumstances, and no one can make it for you.