Autumn Budget 2025 Cash ISA Allowances Cut for Under 65s
Published / Last Updated on 29/11/2025
The main annual ISA allowances of:
- Individual ISA Allowance £20,000 pa.
- Junior ISA Allowance £9,000 pa.
- Lifetime ISA Allowance £4,000 pa.
All remain unchanged and are frozen until tax year 2030/31.
Cash ISA Allowance Cut
- The cash ISA allowance for 18–65-year-olds has been reduced from £20,000 to £12,000 from April 2027.
- 18–65-year-olds will still have the full £20,000 pa ISA allowance but a maximum of £12,000 can be in cash and the balance £8,000 must be invested in markets related funds/investments.
- This is to encourage more investment in UK businesses/shares.
- Over 65s get to keep the full cash ISA allowance of £20,000.
Digitisation of ISAs Postponed
- Digitisation of ISAs has been postponed until 2028.
- It is designed to streamline and simplify reporting by ISA managers as well as allowing multiple ISA subscriptions, removing the need for a new application if an ISA account has been inactive for a period and to allow partial transfers of current year contributions to allow investors to move easily from Cash ISA to Stocks ISAs easily.
- Digitisation should also make it easier for instant full ISA transfers between ISA providers in the same way that ‘instant’ banking transfers under the Faster Payments Service (FPS).
Lifetime ISAs (LISAs) Review
- LISAs are a vehicle for 18-39 years to save in an ISA up to £4,000 pa, with the government adding a 25% (£1,000 pa) bonus, to help people save towards a house deposit or if not, can still be invested in until age 50 and left until retirement age as a tax-free retirement fund.
- The Budget confirmed that LISAs will remain for the time being, but the government will launch an industry consultation in 2026 to deliver a simpler ISA to help people.
Our best guess is that the government wishes to explore the 25% cost to government but getting nothing back when savings are used to buy a home or leave until minimum retirement age (currently age 55, increasing to 57 in 2028).
