What is a cash ISA?
A cash ISA is a savings account where interest is paid free of UK income tax. For 2026/27 the full £20,000 ISA allowance can go into cash. From 6 April 2027 the cash limit falls to £12,000 for savers under 65, while those aged 65 and over keep the full £20,000.
The change announced at the Autumn Budget 2025 makes 2026/27 the last tax year in which an under-65 can shelter the full allowance in cash. Balances already built up are unaffected — the restriction applies to new subscriptions from April 2027 onwards.
Cash ISAs come as easy access, notice or fixed rate. A flexible cash ISA lets you withdraw and replace money within the same tax year without losing the allowance, which not all providers offer.
For a basic rate taxpayer with modest savings, the personal savings allowance may already cover the interest, in which case a cash ISA earns nothing extra. Where rates are higher or savings larger, it matters — and the closing window makes the timing a live question.