⏳ Reading Time: 7 minutesIn the UK, you can take advantage of particularly convenient financial tools such as ISAs. These are individual savings accounts that are tax-free, as you do not pay tax on interest, gains or returns earned through an ISA.
In particular, a Cash ISA is a type of Individual Savings Account that lets you earn tax-free interest on your savings. For the 2026/2027 tax year, the annual ISA allowance is £20,000 (across all types of ISA).
The government has announced that from April 2027 the Cash ISA limit will be reduced to £12,000, although the Stocks and Shares ISA limit will remain at £20,000. Here’s everything you need to know about Cash ISAs.
CharacteristicsCash ISAType of accountIndividual Savings AccountTaxationTax-free interestAnnual allowance£20,000 for 2026/2027Tax year6 April 2026 – 5 April 2027Eligibility age18+InterestPaid monthly or annually, depending on providerFlexibilityYou can split allowance across different ISA typesWithdrawalsUsually allowed, but some accounts may limit access
How does a Cash ISA work?
