Blog
Investments Taxation
Are You Saving… or Missing an Opportunity?
Amy Woolliscroft24th July 2026
If you’re holding a large amount of cash or a high-value Cash ISA, it’s worth taking just 10 minutes to read our short guide on the differences between saving and investing, as well as checking you won't fall foul of the change to taxation on cash held in Stocks and Shares ISAs.
Many people keep substantial sums in cash simply because it feels safe. But not all money needs to be treated the same way.
In our booklet, we explain the simple concept of the 'Three Pots' approach:
• Pot 1 – Emergency Fund: Readily accessible cash for unexpected expenses.
• Pot 2 – Short-Term Money: Funds you’ll need within the next 5 years.
• Pot 3 – Long-Term Money: Money not required for at least 5 years — which may be better suited to investing.
Once you’ve identified how your money is allocated, ask yourself:
Is there cash sitting in Pot 3 that could potentially be working harder for you?
If so, the next step is simple.
Read our guide to understand the advantages and disadvantages of saving versus investing and then arrange a conversation with us. We’ll help you determine whether staying in cash remains the right choice, or whether investing could be more appropriate for your long-term goals.
A small investment of time today could make a significant difference to your future.
And if you already have a Stocks and Shares ISA, there's never been a more important time to take a look at your portfolio in light of the changes to how any cash held within a Stocks and Shares ISA will be taxed.
Holding cash within a Stocks and Shares ISA will attract tax from April 6, 2027, when the government will introduce a 22% tax on interest earned from uninvested cash.
Unlike the previously announced change where over 65s will be able to carry on investing up to £20,000 per tax year in a purely cash ISA (from 6th April 2027, under 65s can only invest up to £12,000 per tax year in a cash ISA), this new levy is designed to prevent people from using non-cash ISAs to bypass new cash ISA limits, regardless of age.
As always, tax treatment depends on individual circumstances and may change over time. Where tax benefits apply, their value will vary based on your personal position and the rules in force.
Remember that investments such as a Stocks and Shares ISA can rise and fall in value, so returns aren’t guaranteed. Cash held in a deposit account (or Cash ISA) offers greater stability in nominal terms, but come with tax implications. Over longer periods, however, many people choose to invest in Stocks and Shares ISAs because inflation can reduce the real value of cash savings over time — although investment outcomes are never certain and you could get back less than the initial sum invested.
Whether you are a client of ours or not, if you would like to review your ISAs not currently held in St. James’s Place portfolios, please do get in touch with us.
Please note SJP does not offer a Cash ISA.
SJP approved 15/7/2027