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The 2025/26 tax year may not have ushered in any notable changes to Individual Savings Accounts (ISAs), but there is widespread speculation that we could see a major overhaul of the current system over the next few months.
In this article, we explain what could happen to ISAs in 2025, how current ISA rules work, and how you can prepare for any changes.
What could happen to ISAs in 2025?
The government has confirmed that it is currently consulting on ISAs. There is widespread speculation that the cash ISA allowance could be reduced to encourage investors to put their money into the stock market and British businesses rather than cash accounts.
Some believe that the cap on cash ISAs could be set at £10,000, whilst others think that the Chancellor could restrict it to just £4,000. It’s likely that any changes will be unveiled in this year’s autumn Budget. However, for the moment, the amount you can put into a cash ISA is unchanged from last year.
Alice Haine of Bestinvest by Evelyn Partners, the DIY investment platform, said: “Your ISA allowance remains at £20,000 this tax year despite the news that reforms may be on the way. Remember any changes, such as a rumoured cap on the amount of cash savers can hold in an ISA, are likely to require a consultation process so it might take some time to come into force – though be prepared for a surprise.
“While the surge in cash ISA deposits in March (up £4.2 billion – an uplift of almost a third on March 2024) was typical of this kind of year, it might indicate that some people were not only trying to improve the tax efficiency of their savings but also trying to get ahead of any changes to the cash ISA allowance.”
If you’re keen to pay as much as you can into cash ISAs now in case a cap is introduced, you can find some of the best rates currently available in our guide Best cash ISA rates – which cash ISAs pay the most interest?
Will there be changes to stocks and shares ISA in 2025?
It’s not only cash ISAs that could potentially be affected by ISA reforms.
Jason Hollands, Managing Director of Bestinvest said: “If you follow the argument through that City firms have been encouraging the Chancellor to curtail cash ISAs to drive more cash to boost economic investment (rather than specifically achieving better returns for the saver), then it begs the question as to what Rachel Reeves might be thinking about stocks and shares ISAs as well? After all, the current Government’s interventionist logic might lead it to conclude that tax incentives should be used to encourage investment into UK markets, not US or overseas businesses like NVIDIA, Apple or Microsoft.
“The flawed idea of an extra £5,000 ‘British ISA’ allowance that was previously taken up by Conservative Chancellor Jeremy Hunt has since been abandoned by Labour, but the arguments for it have opened a Pandora’s Box: a risk now is that the core ISA allowance could be reshaped to fulfil a similar objective instead.
“As with limits on cash in ISAs, could we see a ‘back to the future’ move at some point where stocks and shares ISAs are required to invest primarily or partially in UK equities? Personal equity plans, the predecessors of ISAs, were originally restricted to UK equities and then a limited ability to invest 25% of the allowance overseas in ‘non-qualifying’ investments was introduced before full flexibility was granted.”
If you’re worried about changes to ISAs, then you may want to make the most of ISAs rules as they stand, which allow you to invest globally.
Remember that it’s important never to invest in anything you don’t understand, so if you want personal recommendations based on your attitude to risk and your investment timeframe, you may want to seek professional financial advice.
You can find a local financial advisor on VouchedFor or Unbiased, or for more information, check out our guide on How to find the right financial advisor for you.
ISA changes that happened in 2024
There were several changes to ISAs in the previous 2024/25 tax year. These include the fact that you can now open and make a deposit into multiple accounts of the same ISA type in a single tax year, meaning you have much more freedom over how you use your allowance. For example, you may wish to pay into a variable rate Cash ISA and a fixed rate Cash ISA , or you may simply wish to keep your investments diverse by making use of different stocks and shares ISA providers.
Prior to 2024, you could spread this allowance over the three different kinds of ISA (cash, stocks and shares or innovative finance ISAs) but you couldn’t pay into more than one of the same type. So, for example, you could deposit £10,000 into a cash ISA and £10,000 into a stocks and shares ISA, but not £10,000 into two different cash ISAs.
Since April last year, you’ve also been allowed to make partial transfers from an ISA opened in the same tax year, instead of having to transfer the whole balance.
However, bear in mind that not every ISA provider will allow you to make transfers, so always check a provider’s terms before signing up. Alternatively, you can make a withdrawal and deposit your money into another ISA yourself, but this will eat into your annual allowance, so do so at your own risk.
Learn more about transferring your ISA in our article ISA transfers: what are the rules? and about how the different types of ISA work in our article Everything you need to know about ISAs.
Learn more about ISAs
Individual Savings Accounts are a tax-efficient way to invest your money, and are well worth learning about if you are new to investing. Any returns you make from an ISA, either from interest on your cash or investments, or from selling shares, will be shielded from the taxman, as long as you stay within your annual allowance.
Check out our section on ISAs to learn more.
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