Chancellor reinstates £20,000 Cash ISA annual allowance

By The Financial Edition · 28 October 2026 · 14:55 GMT · Investment Week · 1 min read

Photograph: Diego Delso, delso.photo · CC BY-SA · sector illustration, not event evidence

ISA Allowance Reversal

Chancellor John Healey has reversed former chancellor Rachel Reeves' plan to reduce the annual Cash ISA tax-free allowance from £20,000 to £12,000. The limit will remain at £20,000 for all ages. Proposed anti-circumvention measures, including restrictions on transfers from Stocks and Shares ISAs to Cash ISAs and a proposed charge on cash interest within stocks and shares ISAs, have been dropped.

New Product Proposals

The government will work with the financial sector to develop a new Starter ISA aimed at first-time investors. Additionally, Lifetime ISAs are set to be replaced by First Time Buyer ISAs, with existing penalty rules adjusted so buyers recover at least their initial contributions if a home exceeds price limits.

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