New Cash ISA rules only work if savers understand how to invest effectively

Savers who don’t understand how to invest effectively will lose out to new Cash ISA rules that bring unnecessary complexity to a savings vehicle that’s supposed to be simple, according to Flagstone’s last poll of UK financial advisers for 2025*. 

UK financial advisers were polled last week by Flagstone in response to the decision by HM Treasury to reduce the Cash ISA allowance from £20,000 to £12,000 from April 2027.

Key findings

• 58% of advisers say the new Cash ISA rules will only work if savers understand how to invest effectively rather than save 

• 47% believe the new rules bring unnecessary complexity to a savings vehicle that’s supposed to be easy to understand and easily accessible

• But only 15% say this added complexity will put clients off ISAs as they look to alternative places to put their cash

• 51% expect most clients will continue to save the same amount or more in cash and deposit it in new instruments once they maximise the Cash ISA allowance

Flagstone’s poll also probed advisers’ views on how savers will manage to make the switch from saving to investing: 

• More than a quarter (28%) of advisers say that investing more effectively comes down to how well investment platforms and providers can help investors make informed investment decisions. 

• No respondents (0%) believe that their clients will want to make use of the government’s intended targeted support service to help them make more informed investments.

Alex Schlee, Senior Partnerships Manager at Flagstone, comments: “While many in the savings and financial advice markets would have preferred Cash ISAs to be left alone at the last Budget, we are all breathing a sigh of relief that the intentions of the Treasury are laid bare and we have certainty over the future of ISAs for the next few years to come. 

“What we must wait for now is more clarity over how the Treasury and the investments industry plan to work together to make sure that those who hit the lower Cash ISA threshold sufficiently understand what they can do to put their surplus cash to good work, in ways that are responsible and will generate the protection and returns they enjoyed with a larger Cash ISA. 

“The findings from our poll suggest that, while advisers are very concerned that the new rules will increase complexity, it will be largely the unadvised who are affected by the change. Nurturing a new generation of individuals who take an active interest in how they split their money across investment and savings vehicles is commendable – particularly in a market where the vast majority of people’s cash continues to be completely idle. But unlocking that new cohort of personal finance experts requires substantial education and guidance in a short space of time – April 2027 will be here before we know it.”

* Survey of 106 UK financial advisers by Flagstone, 8-12 December 2025

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