Twelve sets of rules for “simple” ISAs

ISAs used to be simple. Now, they’re edging towards pension-level complexity. With new limits, age-based rules, and multiple legacy products, it’s crucial to stay ahead of the changes.

Why ISAs are no longer simple

Once seen as easy, tax-efficient savings vehicles, ISAs are becoming more complicated. Alongside the headline cash ISA limit cut to £12,000 from 6 April 2027, under 65s will also see changes as follows:

• a ban on transfers from stocks & shares or innovative finance ISAs to cash ISAs;
• “cash-like” investments no longer eligible to be held in stocks and shares ISAs; and
• charges applied to interest paid on cash in stocks & shares or innovative finance ISAs.

Twelve sets of rules – and counting

Rather than moving towards a single ISA regime, we’re heading in the opposite direction. From April 2027 there could be 12 different sets of rules, depending on customer age and product type:

1. Cash ISA (under 65)
2. Cash ISA (65+)
3. Stocks & shares ISA (under 65)
4. Stocks & shares ISA (65+)
5. Innovative finance ISA (under 65)
6. Innovative finance ISA (65+)
7. Lifetime ISA (to be closed)
8. Help to buy ISA (closed to new applicants)
9. New ISA (to be launched following consultation in 2026)
10. Junior cash ISA
11. Junior stocks & shares ISA
12. Child trust fund (closed to new applicants)

What this means for clients

ISAs are far less straightforward. Transfers may be restricted, holding cash in stocks & shares ISAs could attract charges, and lifetime ISAs will close to new entrants. Advisers will need to keep up with the latest rules to make appropriate recommendations to clients.

What’s next

HMRC has said they will consult with the industry to finalise the rules ahead of 6 April 2027 with new draft regulations expected shortly.