Budget 2026: cash ISAs, savings tax and property income
Two saver headlines from Autumn Budget 2026 pull in different directions: cash ISAs stay generous, while tax outside wrappers on savings and property income rises again from April 2027.
Cash ISA limit retained at £20,000
Budget 2025 had planned to cut the cash ISA annual subscription limit to £12,000 for people under 65 from 6 April 2027 (65+ remaining at £20,000), while keeping the overall ISA allowance at £20,000.
Budget 2026 cancelled that cut. Adults can continue to put up to £20,000 a year into a cash ISA within the overall ISA rules. Anti-circumvention ideas tied to the cut (such as blocking certain transfers into cash ISAs) are likewise not proceeding under the updated policy.
If you were reshaping a savings plan around a £12,000 cash cap, revisit that plan — then compare wrappers in ISAs vs pensions.
Savings and property rates: another +2ppt
Budget 2025 already scheduled +2 percentage points on savings and property Income Tax rates from April 2027. Budget 2026 adds a further +2ppt from the same date.
Illustrative combined rates from 2027/28 (England, Wales and Northern Ireland context in Budget materials):
| Band | Approx. rate from Apr 2027 | | --- | --- | | Basic | 24% | | Higher | 44% | | Additional | 49% |
That is 4ppt above the old 20/40/45 earnings-aligned savings rates. Treasury materials note that most Income Tax payers are unaffected because they do not have taxable savings or property income above allowances.
Allowances still matter
- Personal Savings Allowance: typically £1,000 (basic-rate), £500 (higher-rate), £0 (additional-rate) of interest tax-free outside ISAs.
- Starting rate for savings can still apply for people with low earnings.
- Property allowance (£1,000) may cover small amounts of property income.
Interest inside an ISA remains free of UK Income Tax under normal ISA rules — which is why keeping the cash ISA limit matters when rates outside rise.
Landlords and second-income property
Higher property rates increase the tax on taxable rental profits (after allowable costs and any allowance you claim). Budget 2026 also continues a broader compliance agenda (for example marketplace VAT rules) that can affect platforms and operators — separate from individual landlord Income Tax rates.
Enter taxable property income after allowance in the better-off calculator to sketch the extra 2ppt versus the Budget 2025-only path.
Who may feel better or worse?
- Better: under-65s who wanted to keep putting more than £12,000 a year into cash ISAs.
- Worse: people with large taxable interest or property income outside wrappers, especially higher/additional-rate taxpayers.
- Neutral on this axis: employees whose only income is PAYE salary with modest savings inside ISAs.
Action checklist
- Maximise ISA subscriptions if you hold taxable cash outside.
- Check whether interest will exceed your Personal Savings Allowance in 2027/28.
- Review landlord product rates and allowable costs with a qualified adviser or accountant if property income is material.
- Run Am I better off? and read the Budget overview.
Disclaimer
Rates and allowances summarised for education from Budget 2026 publications. Confirm final legislation and your own tax position — FinPlanly does not provide tax advice.
