Is the Personal Savings Allowance (PSA) instead of an ISA allowance?

It is as well as an ISA allowance, so you could still use your ISA allowance as well and there are many reasons why a cash ISA can still be a better place for your savings than an ordinary savings account, even when PSA is here:

• Your interest is tax-free, no matter how much you earn
• No need to worry about tax returns or changes to your tax code
• ISAs can be transferred from one type to another (for example between cash and stocks & shares)
• ISA allowances are now transferrable to your spouse or civil partner if you die, so they'll continue to earn interest tax-free
• Money in a cash ISA is protected from tax year after year, so you can gradually increase the amount you are protecting
• Although interest rates are low now, when they do start increasing the amount of savings you need to tip you over the PSA limit will reduce