UK Investing News: June 2026

The big news this fortnight was the government finally publishing the technical detail of its 2027 ISA shake-up on 23 June. It confirms a smaller cash ISA allowance, a new charge on cash parked inside investment ISAs, and the replacement of the Lifetime ISA. UK shares also hit a fresh high. Here is what changed and why it matters if you hold an ISA, a SIPP or a workplace pension.

Cash ISA allowance to be cut to £12,000 for under-65s

From 6 April 2027 the annual cash ISA limit for people under 65 will fall from £20,000 to £12,000, while savers aged 65 and over keep the full £20,000. The overall £20,000 ISA allowance stays the same, so for under-65s any amount above £12,000 has to go into a stocks and shares ISA or another non-cash wrapper to keep its tax shelter. That means the 2026/27 tax year is the last chance for younger savers to put a full £20,000 into cash if they want to. The policy aim is to nudge long-term money out of cash and into investments, which is the right direction for money you will not touch for years, but it is no reason to invest cash you actually need soon. If you have never bought a fund before, our guide to how to start investing in the UK walks through the first steps. The official detail is in the government’s ISA reform 2027 factsheet.

A 22% charge on cash held inside stocks and shares ISAs

The same 23 June announcement confirmed a flat 22% charge on any interest earned on cash held inside a non-cash ISA, also from 6 April 2027. It is an anti-circumvention rule: without it, under-65s could dodge the lower cash ISA limit by holding cash inside a stocks and shares ISA instead. The charge applies to all account holders regardless of age or tax band, and you will no longer be able to transfer money from a non-cash ISA into a cash ISA, though the reverse is still allowed. Money market funds are exempt, but you will not be allowed to hold a stocks and shares ISA entirely in them. The practical takeaway: do not leave large cash balances sitting uninvested inside your investment ISA, decide what that money is for and either invest it or keep it in a proper cash account. The Treasury’s wording is in the anti-circumvention factsheet; Martin Lewis’s plain-English breakdown is at MoneySavingExpert.

Lifetime ISA to be replaced by a First-Time Buyer ISA

The government also published plans on 23 June to replace the Lifetime ISA with a new First-Time Buyer ISA, with a consultation closing in mid-August. The new account would be open to anyone over 18 buying a first home, available as cash or stocks and shares, and crucially would drop the early-withdrawal penalty that has long caught out LISA savers who needed their money. There is no detail yet on the government bonus, contribution limits or the property price cap, and existing Lifetime ISAs will continue, so there is no need to act today. If you already hold a LISA, keep paying in as normal until the rules are firmed up. The full ten-point summary is at MoneySavingExpert.

FTSE 100 climbs to a fresh high near 10,530

UK shares pushed to a new high on 25 June, with the FTSE 100 rising 0.65% to about 10,530, helped by a rebound in global tech sentiment, strong corporate updates and renewed takeover activity. The index is up roughly 20% over the past year. A record close is satisfying to watch but it is not a signal to pile in or to wait for a dip: the steadier approach is to keep contributing on a fixed schedule whatever the headline number is doing. For why that beats trying to time entries, see our explainer on lump sum versus pound-cost averaging. Live levels and the day’s movers are tracked by Trading Economics.