Cash ISA Changes Calculator

From April 2027 the Cash ISA allowance drops to £12,000 and savings tax rises to 22% · 42% · 47%. Find out exactly what it costs you and what to do about it.

Extra Tax Over 5 Years
£0
If you keep saving the displaced cash outside an ISA
Cash ISA Room Lost / Year
£0
Cash Displaced / Year
£0
Your New Savings Tax Rate
22%
Extra Tax in Year 1
£0
Extra Tax in Final Year
£0
If Invested in S&S ISA Instead
£0 tax
Enter your details to get started.
Cumulative Extra Tax · Year by Year
Year-by-Year Breakdown
Year Taxable Cash Pot Interest Earned Extra Tax Cumulative Tax

Old Rules vs New Rules · What Changes in April 2027

Rule Until 5 April 2027 From 6 April 2027
Cash ISA allowance (under 65)£20,000£12,000
Cash ISA allowance (65 and over)£20,000£20,000 · unchanged
Overall ISA allowance£20,000£20,000 · unchanged
Savings interest tax · basic rate20%22%
Savings interest tax · higher rate40%42%
Savings interest tax · additional rate45%47%
Interest on cash inside a S&S ISATax-free22% charge
S&S ISA to Cash ISA transfers (under 65)AllowedBlocked
Existing Cash ISA balancesTax-freeTax-free · unchanged
Personal Savings Allowance£1,000 / £500 / £0£1,000 / £500 / £0 · unchanged

Your Options for the Displaced £8,000

📈
Invest it in a S&S ISA

Growth and dividends stay tax-free. This is what the reform is designed to push you toward. Money must be genuinely invested · uninvested cash earns a 22% interest charge.

🏦
Keep it in taxable savings

Simple, but interest above your Personal Savings Allowance is taxed at the new 22% / 42% / 47% rates. This calculator shows that cost.

💷
Use premium bonds or gilts

Premium Bond prizes are tax-free (up to £50,000 held). Low-coupon gilts held to maturity generate mostly tax-free capital gains rather than taxed interest.

⏳
Fill your Cash ISA before April 2027

You still get the full £20,000 Cash ISA allowance in 2026/27. Money already inside stays tax-free forever, so use the remaining window.

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Cash ISA Changes FAQs

What is happening to the Cash ISA allowance?
From April 2027 the amount you can put into a Cash ISA each year falls from £20,000 to £12,000 if you are under 65. The overall £20,000 ISA allowance stays the same, but the remaining £8,000 can only go into a Stocks and Shares ISA or Innovative Finance ISA. Savers aged 65 and over keep the full £20,000 Cash ISA allowance.
How is tax on savings interest changing?
From April 2027, tax on savings interest outside an ISA rises by 2 percentage points across every band: basic-rate taxpayers pay 22% (up from 20%), higher-rate taxpayers pay 42% (up from 40%) and additional-rate taxpayers pay 47% (up from 45%). The Personal Savings Allowance of £1,000 (basic rate) and £500 (higher rate) still applies before any tax is due · additional-rate taxpayers get no allowance.
Does existing money in my Cash ISA get affected?
No. Money already inside a Cash ISA stays completely tax-free and there is no cap on the total you can hold. The £12,000 limit only applies to new contributions from 6 April 2027 onwards. You can also still transfer old Cash ISA balances between providers to chase better rates. This makes the 2026/27 tax year the last chance to shelter a full £20,000 in cash.
Can I just hold cash in a Stocks and Shares ISA instead?
The government thought of that. From April 2027 an anti-avoidance charge of 22% applies to interest earned on uninvested cash held inside a Stocks and Shares ISA, transfers from a Stocks and Shares ISA into a Cash ISA are blocked for under-65s, and holding 100% money market funds is prevented. The rules are designed so the extra £8,000 is genuinely invested in markets, not parked as cash.
Who is not affected by the Cash ISA cut?
Savers aged 65 and over keep the full £20,000 Cash ISA allowance. Anyone who saves £12,000 or less in cash each year is also unaffected, as are people whose spare savings already go into investments. Existing ISA balances are untouched for everyone. The change mainly hits under-65s who save more than £12,000 a year in cash.
Why is the government cutting the Cash ISA allowance?
The stated aim is to push more of the roughly £300 billion sitting in Cash ISAs toward UK investments, boosting returns for savers and capital for British companies. Critics argue it simply raises tax on cautious savers. Either way, the change was confirmed at the Budget and takes effect on 6 April 2027, so you have the 2026/27 tax year to plan around it.

For informational purposes only · Not financial advice · Based on ISA reform rules announced for April 2027: £12,000 Cash ISA cap for under-65s, savings interest tax 22% / 42% / 47%, Personal Savings Allowance unchanged · Rules may change before implementation · Investments can fall as well as rise