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Several important announcements have already been made that impact our personal finances this summer. From changes to the ISA rules, a hike in energy prices, and the end of a familiar financial high street name, our fortnightly news round-up looks at the latest developments most likely to affect the over-50s.
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Interest earned on uninvested cash held within stocks and shares ISAs will be taxed at a rate of 22% from April 2027, the Treasury has confirmed, a decision that experts have described as “backwards”.
ISAs are marketed as tax-friendly products, enabling savers and investors to grow a range of assets tax-free - from the relative security of cash at one end of the risk scale, to market-based investments at the other.
But in a move that overrides the sacrosanct status of ISAs, the government is now keen to deter people from holding money in investment-based ISAs that’s being left to earn interest tax-free for long periods.
This could be cash that investors have deposited in a stocks and shares ISA that’s yet to be invested. Or the proceeds from dividend payments generated by a particular stocks and shares account.
Investors commonly set up stocks and shares ISAs on DIY investing platforms. Platforms pay variable amounts of interest on uninvested cash held in these accounts, but this will now be subject to tax from next year.
This amount is in line with the uplifted income tax rate on savings interest of 22% for the tax year 2027/28 beginning on 6 April 2027. The 22% charge will also apply to “alternative finance returns”, for example, on Sharia-compliant products.
The charge won’t apply, however, on returns from money market funds, a type of market-based investment with cash-like characteristics that hold short-term debt securities.
The latest decision comes as part of a package of wider government measures which will alter the ISA landscape significantly from next year.
From next April, the annual cash ISA limit drops from £20,000 to £12,000 for the under-65s but remains in situ for those aged 65 or older.
The government has now clarified that the £20,000 cash ISA allowance will start in the tax year in which you turn 65. This means that those whose birthday it is on 5 April, the last day of the tax year, will receive the full £20,000 allowance.
Over-65s who have a stocks and shares ISA will be subject to the same charge on interest on uninvested cash.
Brian Byrnes from Moneybox, the saving and investing app, says: “New charges, restrictions, and eligibility rules within stocks and shares ISAs will make one of the UK’s most important investment products significantly more complex.
“The government says it wants more people to move from cash into long-term investing, but these changes risk pulling people in the opposite direction.”
Also as part of the measures, Lifetime ISAs are set to be withdrawn from the market. Plans are also in train for the introduction of a ‘First Time Buyer ISA’.
We’ll publish a comprehensive ISA round-up later in the year.
A quarter of over-55s (25%) have never openly discussed inheritance with their family, running the risk of unforeseen tax bills and a breakdown in family relations when a loved one dies.
Inheritance remains one of the UK’s biggest taboos with widespread gaps in tax and estate planning knowledge, according to research from wealth managers Mattioli Woods. The findings revealed “ongoing emotional discomfort”, “privacy concerns”, and perceptions that it was “too early” for family to raise such issues.
The majority of people aged over 55 (83%) understand the importance of having a valid will in place.
But just one-in-three in this age-range (35%) realise that pensions will be considered for inheritance tax purposes from April 2027, while fewer than one-in-seven (15%) understand key IHT allowances such as the ‘nil rate band’.
Around the regions, Mattioli Woods found that Londoners are the least likely to have discussed inheritance issues, while families in eastern England were most open to having a conversation on the subject.
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The Halifax brand is being axed with the current accounts, mortgages, and insurance policies of existing customers being swallowed up by the Lloyds Banking Group.
Lloyds, which owns Halifax, itself a longstanding financial services giant, has confirmed the latter’s familiar logo, products, and nationwide branch network will be phased out this year and next. They will be replaced instead with Lloyds-branded accounts and policies.
The move means Lloyds will become the group’s only banking brand in England, Wales, and Northern Ireland. But it said the Bank of Scotland, another of the businesses within its umbrella, will not change.
Lloyds said there is nothing Halifax customers need to do immediately and that it would be contacting them through channels such as the Halifax app, online banking, email and by post to provide more details.
The company added that account numbers and sort codes will remain the same as they are now and that customers’ money is safe, remains exactly where it is, and that there will be no changes to existing Financial Services Compensation Scheme protection.
Car and home insurance cover will continue as before and debit/credit cards will still work with no immediate change to customer personal identification numbers, or PINs. Cards will eventually be replaced by Lloyds-branded versions.
Lloyds said scheduled payments, such as direct debits, and standing orders will carry on as before. And the same applies to loan, mortgage, and credit card repayments.
Power of attorney arrangements made through Halifax will continue to operate and online/mobile banking services will keep working.
With such a huge transition in the offing, Halifax customers should be extra wary of scammers who will potentially capitalise on the interim confusion a move like this could bring.
Halifax says it will only contact customers about this transition by email, letter, or online/mobile banking message, and that it won’t call, text, or ask you to log in with a link or QR code.
Homes in England, Scotland, and Wales on variable rate energy tariffs, well over half of the total number, will experience a 13% rise in their annual bills after the latest change in the quarterly price cap came into force on 1 July 2026
The cap is set by the energy regulator, Ofgem, and limits the amount that suppliers can charge for each unit of gas and electricity, as well as dictating the level of standing charges.
The hike, attributed to the soaring cost of wholesale gas due to the Middle East conflict, means the annual cost of gas and electricity for a household with typical consumption will rise to £1,862, up from £1,641 for the previous quarter.
Customers on fixed-rate energy tariffs will not be affected by July’s increase. But those nearing the end of a fixed-rate deal who are looking to renew, or households looking to fix for the first time, will find the cost of these deals moving toward the level of the new cap.
Sarah Coles, head of personal finance at AJ Bell, says: “The fact this is hitting at a warmer time of year means we may not feel the full impact of the rise until the colder weather sets in. However, it’s a great opportunity to consider how you will cope later in the year and whether there are some options that could work for you.
Coles suggests 10 ways to beat the energy price hike:
You could also consider these tips and find out more here about how to switch energy providers.
Nearly two-thirds (61%) of retirees who withdrew tax-free cash from their pension ahead of last year’s controversial budget say they now regret doing so, according to financial planning firm, Quilter.
The company found that more than half of retirees (57%) withdrew tax-free cash ahead of the budget, with 41% doing so in anticipation of a potential rule change.
The run-up to the 2025 budget November was awash with speculation over potential tax hikes, as well as the fate of the longstanding 25% tax-free lump sum associated with pensions.
So rife were the rumours that the Chancellor, Rachel Reeves, took the highly unusual step of making a pre-budget address three weeks before the main event to assuage the City’s doubts about her plans.
Quilter says that, as a result, many retirees appear to have interpreted the lack of reassurance as a signal that a change to pensions tax-free cash was likely, prompting pre-emptive withdrawals to lock in existing, pre-budget rules.
Jon Greer, head of retirement policy at Quilter, says: “The Chancellor only ruled out changes to the tax-free lump sum in the final days before the budget, by which point the damage had already been done. This cannot be repeated in the 2026 budget.
“Allowing rumours to fill the gap for weeks or months risks undermining confidence in plans that may have been laid for decades and leading to poorer outcomes.”
Many people haven't heard of stocks and shares ISAs, and many more are unsure how they work. Are you holding your finances back? Find out more.
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Find out when buying an annuity might help reduce inheritance tax.
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