Martin Lewis says how to put £92k tax free in a Cash ISA despite limit cut | Personal Finance | Finance

Money expert Martin Lewis has explained how savers can have as much as £92,000 in a Cash ISA even after the limits are cut for under-65s in 2027.

Martin returned on ITV1 and ITVX on Tuesday, December 2 with a fresh batch of money saving tips and post-Budget analysis following rule changes announced last week.

The Money Saving Expert founder’s episode of The Martin Lewis Money Show Live included an explanation of the new Cash ISA rules, and how even those below the new under-65s threshold can have as much as £92,000 in their Cash ISA by the end of the first tax year where rules change, assuming they’ve been maxing out their allowances each year for the past two years.

Last week, Rachel Reeves announced following months of speculation that Cash ISA limits will be reduced to just £12,000 for everyone aged under 65, while total ISA limits including stocks and shares will remain at £20,000 per financial year.

Martin explained to his audience how the changes will work and why some savers will be able to have many tens of thousands more in their Cash ISAs by then.

He said: “All UK adults can currently put up to £20,000 in a tax year in ISAs, in cash or shares or in a mix. Once money is in an ISA it remains tax-free, so you can build up an ISA pot.

“What do I mean by that? Well let’s say you put £20,000 in two years ago, and then you put £20,000 in last year, that’s £40,000 and then you put £20,000 in this tax year, that’s £60,000, then £20,000 in next tax year that’s £80,000, and then the next year it’s dropping for some, to £12,000.

“But suddenly I’ve got nearly £100,000 haven’t I. And I’ve got interest on top. Which is why some people have hundreds of thousands of pounds in Cash ISAs and over £1M in shares ISAs, because they can grow more quickly. That’s what I mean year by year.”

Martin then explained that in April 2027, the Cash ISA limit is going to be cut to £12,000 per tax year for under-65s.

He added: “Lots of confusion on this. So, for me, it’s a piece of cake. The ISA limit is £20,000 and will remain £20,000 even for under-65s after 2027. Which means you could put £20,000 in shares ISA, you could also choose to put some in cash. Let’s say you’ve got a grand in cash, well that reduces the amount you can put in shares by £1,000 because it still has the total £20,000. And you can do that all the way up from 2027, to £12,000.

“So you could have £12,000 in cash and £8,000 in shares. But of course, you don’t have to put the money in shares. So you can just from that point, have £12,000 in cash. That’s how it works. £20,000 in total maximum, £12,000 in cash.

“But the key to this rule is it only impacts new money paid in. Any money remember all those years, all that, that’s already in an ISA, that doesn’t impact the allowance, it doesn’t change that at all and all that old money you can still transfer to another Cash ISA provider without any problems whatsoever.”

The Martin Lewis Money Show Live, Tuesday December 2 episode is still available to watch via ITVX.