Anyone with savings is being urged to follow a ‘4% rule’ to make the most of tax-free interest before the start of the new tax year on April 6. Despite changes which have been announced for Cash ISAs for 2027, the limits for this coming tax year remain unchanged, meaning adult savers can put up to £20,000 into a Cash ISA within the current tax year and savings will be free of income tax and capital gains.

From April 2027, cash ISA allowances will be cut to £12,000, meaning the current and next tax years are the last to shelter the full £20,000. But savers only have until April 5 to capitalise on this allowance, so if you haven’t opened a Cash ISA yet, it’s well worth considering before the new tax year starts.

Several ISA providers are currently offering inflation-beating rates of above 4% interest on ISA products, so now is an ideal opportunity to make the most of tax-free interest on your savings.

This time of year, called ‘the golden window’, tends to be the best time for ISA savers to get higher rates, as ISA providers look to attract customers trying to use up their £20,000 allowances before it resets in the new tax year. That means by acting now you can secure a better rate for your savings and use up your tax-free allowance.

James McCaffrey, spokesperson for TotallyMoney, said anyone who is sitting on savings in an account offering below 4% interest should consider moving the money into a higher-paying Cash ISA by April 5, as this is the final day before the new tax year starts.

Mr McCaffrey said: “With the ‘Golden Window’ now well and truly open, we’re seeing fresh ‘best buys’ come onto the market almost daily.

“If you’re sitting on savings, check the rate your provider is paying, and if it’s below 4%, then consider moving your money. It’s as simple as filling out a form, and you can transfer all or part of your savings, with cash ISA transfers taking no longer than 15 days.

“When taking out, or switching to any financial product it’s always important to read the small print. One key thing with ISAs is that you might be penalised for withdrawing your money – so it’s a good idea to keep some separate in an easy access savings account in case of emergency.”

According to MoneySavingExpert (MSE), the top paying cash ISA right now is an easy access Trading212 account, offering 4.68% AER for new customers.

Other good deals include Saffron Building Society at a rate of 4.5%, Plum at 4.66% for new customers only and Virgin Money at a rate of 4.15%.

Mr McCaffrey added: “Right now is peak season for ISAs, with providers improving rates as they battle it out to attract customers. And with the ISA allowance being cut to £12,000 from April 2027, anybody who can afford to, should make the most of the full £20,000 while they can.

“When shopping around, don’t ignore the smaller providers, as they’ll often be providing the best rates – while you’ll get the exact same protection as you would with the high street banks under the Financial Services Compensation Scheme.

“ISA allowances reset on the 6th of April – and what you don’t use before then, you’ll lose. So, if you’re sitting on savings, or you’ve been meaning to open an ISA for a while, now’s the time to make a move. You can put up to £20,000 across all ISA types this year, and any interest earned is tax-free.”