UK investment platforms will pay a flat 22% charge on interest earned by cash held in Stocks and Shares ISAs from April 6, 2027. Most of their clients do not know the rule exists, according to a survey eToro published today (Tuesday).
Platforms pay interest on uninvested ISA cash and advertise it. XTB offered 4.75% on idle balances when it launched a zero-commission UK ISA in December 2024.
Under the new rules, the ISA manager pays the charge to HM Revenue and Customs (HMRC). At the same time, the cash ISA allowance for savers under 65 falls from £20,000 to £12,000.
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The government laid the regulations before Parliament on September 14, after a consultation that closed on August 2, according to HMRC. Chancellor Rachel Reeves first announced the cash ISA cut in the Autumn Budget in November 2025.
Savers Misread the Transfer Ban
Just 38% of the 2,000 people polled for eToro knew about the 22% charge. Another 48% wrongly believe someone under 65 will still be able to move money from a Stocks and Shares ISA into a cash ISA after April, a transfer the regulations prohibit.
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Appinio ran the survey for eToro on September 16 and 17 among UK savers aged 18 to 65. Only 2% correctly identified at least six of the seven changes, and about a third of respondents answered "don't know" to each statement, the company said.
Dan Moczulski, UK managing director at eToro, said most people had heard of the reform but did not understand what it meant for their money.
"Uncertainty risks pushing people towards doing nothing at all," Moczulski said.
The survey points the same way. Some 59% said they would rather leave money where it is than risk a mistake, and 31% said the smaller cash allowance would make them more likely to invest through a Stocks and Shares ISA.
Among those aged 55 to 65, 75% see the charge as a penalty and 19% feel confident moving money between cash and investments, compared with 38% of 18- to 24-year-olds.
Platforms Prepare for April 2027
eToro sells Stocks and Shares ISAs in the UK through Moneyfarm, and added a do-it-yourself version with more than 1,000 assets in February 2025 next to its managed ISA.
Rivals have pushed into the same wrapper. CMC Markets opened fractional shares from £1 across ISAs, SIPPs and general investment accounts in July, while AJ Bell Chief Executive Michael Summersgill urged the government before the Budget to "go back to the drawing board" on ISA reform.
The rules also make a Stocks and Shares ISA invested entirely in money market funds a non-qualifying investment, closing a route savers could have used to hold cash-like assets outside the lower cash allowance.
The £12,000 limit applies to new subscriptions from April 6, 2027 and does not reduce existing cash ISA balances. Savers aged 65 and over keep the £20,000 cash allowance and can still transfer from a Stocks and Shares ISA into a cash ISA.
