2025 Budget update

 

Changes to ISAs from 06 April 2027

The government announced changes to Individual Savings Accounts (ISAs) in the 2025 Budget. These come into effect from 06 April 2027.

Until 06 April 2027 everyone is able to split their £20,000 ISA allowance between the available ISA types in line with the current rules.

From 06 April 2027, your overall £20,000 ISA allowance remains the same. If you’re under 65, there are new rules for cash ISAs.

Cash ISA changes

New rules for Cash ISAs if you’re under 65

From 06 April 2027, if you’re under 65, the Cash ISA limit will drop from £20,000 to £12,000.

You can still use the remaining £8,000 in other types of ISAs such as a Stocks and Shares or Innovative Finance ISA, or a maximum of £4,000 into a Lifetime ISA (LISA). We don't offer Innovative Finance ISAs or LISAs at the moment.

No changes for over 65s

If you’re 65 or older, you’ll still be able to put the full £20,000 into a Cash ISA.

Other ISA limits stay the same:

  • Lifetime ISA is £4,000 and counts as part of your overall £20,000 ISA allowance.
  • Junior ISA / Child Trust Fund is £9,000 for each child (separate to your £20,000 ISA allowance).
     

Stocks and Shares ISA updates

Understanding the ISA changes

What does this mean for you?

The basics of good financial planning don’t change:

  • Cash savings are great for short-term goals.
  • Considering investing may help your money grow over time.

Why the changes?

The government wants to encourage more people to invest for the long term. In the 2025 Autumn Budget speech, the Chancellor highlighted that historically, investments have outperformed cash savings.

Watch your money work

While future performance isn’t guaranteed, it’s still interesting to compare cash savings performance with investment growth over a 10-year period.

Sources

Savings - MoneyFacts, 12m Fixed Non-ISA rates, January 2025.

Investments - S&P Dow Jones Indices, S&P World Index (GBP). Excludes fees and does not include any dividends or reinvestment.

These figures refer to the past and past performance is not a reliable indicator of future performance. See a data breakdown of the performance in the table here.

Smart strategies for building wealth

Make the most of your ISA allowance

ISAs are one of the most tax-efficient ways to save and invest. And from 06 April 2027, that matters even more.

  • Tax on savings interest outside ISAs will rise by 2%.
  • New rates: 22% (basic), 42% (higher), 47% (additional).

In addition, rates of Income Tax applicable to dividend income are changing.

From 06 April 2026, the basic rate will be increased by 2% to 10.75% and the higher rate will be increased by 2% to 35.75%. The additional rate will remain unchanged at 39.35%.

Using a Stocks and Shares ISA could help you stay tax-efficient.

Investing in your future

If you want to use your full ISA allowance from 06 April 2027, we’ve got options to help:

  • Ready-Made Investment ISA – built and managed by our experts. With low, medium or high-risk investment options, we do the hard work for you.
  • Share Dealing ISA – perfect for choosing your own stocks and shares, funds, ETFs and more.
  • Invest Wise ISA – free investing account for 18-25 year olds with no admin fee until you’re 26.

New to investing? Start small – you can invest from £50 a month with our Ready-Made Investment ISA. Or set up a regular plan with no trading fees on our Share Dealing ISA.

Thinking about ISA transfers?

Transfers keep your ISA tax benefits – but make sure you do it properly. Don’t take out the money into a normal account during the process. We can help with transfers.

If you’re considering moving money between Cash and Stocks and Shares ISAs, check if it’s right for your goals. Cash is lower risk, but inflation can eat into its buying power. Investments can potentially offer more growth if you’ve got time on your side.

Investing for longer increases the likelihood of positive returns. Over a period of 5 years or more, investments usually give you a higher return compared to cash savings. But investments can go down as well as up in value, so you could get back less than you put in. Tax treatment depends on individual circumstances and may be subject to change in the future.

Protecting your money

The Financial Services Compensation Scheme (FSCS) protects the eligible money you hold with us.

More about the FSCS

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Important legal information

The Lloyds Bank Direct Investments Service is operated by Halifax Share Dealing Limited. Registered Office: Trinity Road, Halifax, West Yorkshire, HX1 2RG. Registered in England and Wales no. 3195646. Halifax Share Dealing Limited is authorised and regulated by the Financial Conduct Authority under registration number 183332. A Member of the London Stock Exchange and an HM Revenue & Customs Approved ISA Manager.