- Half of Cash ISA (49%) savers said they don’t expect next April’s cut to the Cash ISA allowance, from £20,000 to £12,000 for under 65s, to alter what they do with their money, according to a recent survey by AJ Bell*
- More than a fifth (22%) say they’ll move their money into a non-ISA cash savings account
- Just 13% said they could invest in the UK stock market, while 11% said they’d invest in global stocks
- One in 20 (5%) say after the Cash ISA allowance is reduced, they’d personally consider putting the money in crypto instead
- Around a tenth (9%) said they’d move their money to NS&I products such as Premium Bonds, compared with almost a quarter (24%) last year
- Just under a tenth (8%) said they would spend the money, while a similar proportion said they would pay down mortgage debt
- The change could mean more people opt for Cash ISAs rather than investing this year, which could see savers lose out over time
Sarah Coles, head of personal finance at AJ Bell, comments:
“The Cash ISA allowance cut next year is unlikely to boost investment. In fact, it could actively put people off. When asked what they’d do with their money once the limit is cut, the most popular answer among Cash ISA holders was that it won’t change their saving habits at all, but numerous others said they’d buy cryptocurrencies, spend it, or just pay down their mortgage instead.
“The government is yet to publish the final ISA rules ahead of a 40% cut to the Cash ISA allowance for under 65s from next April, however savers are already making their minds up.
“Many of them have dismissed the notion that the changes will encourage more people to invest their cash for the long term. Half of Cash ISA holders believe the impending cut will make no difference whatsoever to their saving habits, while more than a fifth would choose a non-ISA cash account. This was the most common answer among those who’d made their minds up about where to put their money, which could run the risk of savers being landed with new tax bills.
“Other answers come with real risks. One in 20 said they’d invest in crypto, which means taking on a significantly higher level of risk. The fact that even a small proportion of Cash ISA holders are more willing to back volatile assets such as crypto over less risky investments that could allow them to steadily grow their wealth over the long term highlights the potential adverse effects of the Cash ISA cut.
“Meanwhile, almost one in 10 say they would pay down mortgage debt. This may make sense for their wider finances, but if this money forms part of their emergency savings safety net, it could leave them high and dry if they’re hit by the unexpected. The same proportion say they would just spend the money, which could damage their financial resilience in the years to come.
“Notably, the proportion of people who say they would opt for Premium Bonds or other NS&I savings has shrunk in the past year. This could owe something to cuts in the prize rate in recent months, but is also likely to be at least in part due to news that NS&I operational failures caused delays paying out Premium Bond holders’ funds to bereaved relatives.
“Cash ISA savers under 65 now have less than a year to make the most of the full £20,000 allowance before it’s cut to £12,000 in April 2027, so it’s likely many will be thinking ahead about redirecting any spare cash.
“While there may be a temptation to stuff Cash ISAs before the allowance drops, savers might benefit from exploring whether a Stocks and Shares ISA could be a better home for their money in the long run. History shows that investing in the stock market beats cash and inflation over the long term, so unless you need the money in the near future it could be worth investing at least a portion of it and letting your pot grow in time.
“Of course, there are no guarantees when it comes to investing, and how markets have fared in the past is no indication of how they might perform in the future. But if you’d put £10,000 into cash savings over the past 10 years, your pot could be worth £12,050, whereas if you’d put it in a global tracker it might have grown to £34,760**. It’s a handy indication of just how much difference investing would have made over that period.”
Source: AJ Bell/Opinium. Q2: You can currently save up to £20,000 tax-free in a Cash ISA each tax year, however, from 6 April 2027 this allowance will be reduced to £12,000 a year for anyone under age 65. Does this change what you might do with your money, and if so, what are you planning to do with that money instead? Please select all that apply.
*Based on a nationally representative survey of 2,000 UK adults carried out online by Opinium on behalf of AJ Bell between 3 and 7 April 2026. Of this sample, 923 said they currently held a Cash ISA.
**Source: FE Analytics, 10 years to 21 April 2026. Based on an investment in Fidelity Index World and BlackRock ICS Sterling Liquidity (as a proxy for cash).
