What is the ISA allowance for 2026/27?

The total ISA allowance for 2026/27 (6 April 2026 to 5 April 2027) is £20,000. This is the maximum you can pay into ISAs in the tax year. You can split this across different types of ISA — for example, £10,000 in a Cash ISA and £10,000 in a Stocks and Shares ISA — but the total across all ISAs cannot exceed £20,000. The Lifetime ISA has a separate sub-limit of £4,000 (which counts towards the £20,000 total).

Can I have more than one ISA?

Yes — since April 2024, you can open and pay into multiple ISAs of the same type in the same tax year. Previously, you could only pay into one Cash ISA per year. Now you can split your allowance across multiple Cash ISAs, multiple Stocks and Shares ISAs, etc. Your total contributions across all ISAs still cannot exceed £20,000.

What happens if I exceed the ISA allowance?

If you pay in more than £20,000 across all your ISAs in a tax year, HMRC will contact you and the excess will need to be removed and may lose its tax-free status. Your ISA provider should prevent you from exceeding your allowance with them, but if you have ISAs with multiple providers, it's your responsibility to track your total contributions.

Do I lose my ISA allowance if I don't use it?

Yes — the ISA allowance is 'use it or lose it'. If you don't use your full £20,000 allowance in a tax year, you cannot carry the unused amount into the next year. Each tax year starts with a fresh £20,000 allowance. However, money already in your ISAs continues to grow tax-free regardless of the annual allowance.

ISA Allowance 2026/27 — Limits, Types, and Rules Explained | PocketWise

Your ISA allowance lets you save or invest up to £20,000 per year completely free from Income Tax, Capital Gains Tax, and Dividend Tax.

ISA Allowance — 2026/27

Detail	2026/27
Total ISA allowance	£20,000
Cash ISA limit	Up to £20,000 (within total)
Stocks and Shares ISA limit	Up to £20,000 (within total)
Innovative Finance ISA limit	Up to £20,000 (within total)
Lifetime ISA limit	£4,000 (within total)
Junior ISA limit	£9,000 (separate — does not count towards adult allowance)

The £20,000 is a combined total. You can split it however you like across different ISA types, but cannot exceed £20,000 in total.

ISA Allowance History

Tax year	Annual ISA allowance	Junior ISA allowance
2024/25	£20,000	£9,000
2025/26	£20,000	£9,000
2026/27	£20,000	£9,000

The ISA allowance has been £20,000 since 2017/18.

Types of ISA

ISA type	What it holds	Risk level	Best for
Cash ISA	Cash savings — earns interest	None (capital protected)	Short-term savings, emergency fund, risk-averse savers
Stocks and Shares ISA	Investments — funds, shares, bonds, ETFs	Medium–High (capital at risk)	Long-term growth (5+ years), building wealth
Innovative Finance ISA (IFISA)	Peer-to-peer lending	Medium–High (capital at risk)	Higher interest seekers willing to accept lending risk
Lifetime ISA (LISA)	Cash or investments + 25% government bonus	Depends on whether cash or investments	First home purchase or retirement (18–39 year olds)
Junior ISA (JISA)	Cash or investments — held until child turns 18	Depends on type chosen	Saving for children’s future

Tax Benefits of ISAs

Tax	ISA treatment
Income Tax on interest	Tax-free — no tax on Cash ISA interest
Capital Gains Tax	Tax-free — no CGT on profits from Stocks and Shares ISA
Dividend Tax	Tax-free — no tax on dividends received within an ISA
Reporting	None — no need to declare ISA income on your tax return

Unlike the Personal Savings Allowance (£1,000 for basic rate, £500 for higher rate), the ISA shelter has no limit on the tax-free returns — your entire ISA pot grows tax-free regardless of size.

How to Split Your Allowance — Examples

Scenario	Cash ISA	Stocks & Shares ISA	LISA	Total
All in cash	£20,000	£0	£0	£20,000
All invested	£0	£20,000	£0	£20,000
Balanced	£10,000	£10,000	£0	£20,000
First-time buyer (under 40)	£6,000	£10,000	£4,000	£20,000
Young saver	£5,000	£11,000	£4,000	£20,000
Risk-averse	£16,000	£4,000	£0	£20,000

Cash ISA — Key Details

Feature	Detail
Risk	None — your capital is protected
Returns	Interest rate set by provider — currently 4%–5% AER
Access	Easy-access, notice, or fixed-rate options available
FSCS protection	Yes — up to £85,000 per provider (£170,000 for joint)
Multiple Cash ISAs?	Yes — since April 2024, you can open multiple in the same tax year
Transfer?	You can transfer between providers without losing tax-free status
Flexible ISA	Some Cash ISAs are “flexible” — allowing you to withdraw and replace in the same tax year without using more allowance

Cash ISA Types

Type	Interest rate (typical)	Access	Best for
Easy-access	4.0%–4.5% AER	Instant	Emergency fund, flexibility
Notice (e.g. 90-day)	4.3%–4.8% AER	After notice period	Money you won’t need for a few months
Fixed-rate (1 year)	4.3%–4.7% AER	Locked for 1 year	Money you don’t need for 12 months
Fixed-rate (2 years)	4.0%–4.5% AER	Locked for 2 years	Medium-term savings

Stocks and Shares ISA — Key Details

Feature	Detail
Risk	Medium–High — your capital is at risk
Returns	Variable — depends on investments chosen. Historically 7%–10% average annual return for diversified global equities (long-term)
Access	Can usually sell and withdraw within a few days
What you can hold	Funds, shares, investment trusts, ETFs, bonds, gilts
FSCS protection	Up to £85,000 if the provider fails (not for investment losses)
Platform fees	0.15%–0.45% per year typically
Fund fees	0.1%–1.5% per year depending on fund type

When to Use a Stocks and Shares ISA vs Cash ISA

Timeframe	Best option
Under 3 years	Cash ISA — too short for investment risk
3–5 years	Cash ISA or cautious mix
5–10 years	Stocks and Shares ISA likely better over this period
10+ years	Stocks and Shares ISA — time to ride out volatility

Lifetime ISA (LISA) — Key Details

Feature	Detail
Annual limit	£4,000 (counts towards £20,000 total)
Government bonus	25% — up to £1,000 per year
Use for	First home purchase (up to £450,000) or retirement (from age 60)
Age to open	18–39
Age to contribute	18–49
Withdrawal penalty	25% penalty if withdrawn for any other purpose (effectively loses your bonus + 6.25% of your own money)
Cash or investments?	Both available — choose based on your timeline

LISA for First-Time Buyers

Detail	Information
Property price limit	Up to £450,000
Must be open for	At least 12 months before using for a house purchase
Can be used for	Exchange and completion — solicitor handles the withdrawal
Combines with	Help to Buy ISA (if you have one — but can only use one bonus per property)
Maximum bonus	£1,000/year × up to 32 years of contributions

Junior ISA — Key Details

Feature	Detail
Annual limit	£9,000 (separate from adult allowance)
Who can open?	Parent or legal guardian for child under 18
Who can contribute?	Anyone — parents, grandparents, family, friends
Access	Child can manage from 16, withdraw from 18
Types	Cash JISA or Stocks and Shares JISA
Tax-free?	Yes — completely tax-free
Transfer to adult ISA	Automatically becomes an adult ISA at 18

See our Child Trust Fund guide for children with existing CTFs.

Key ISA Rules

Rule	Detail
Tax year	6 April to 5 April
Use it or lose it	Unused allowance cannot be carried forward
Multiple ISAs	Allowed from April 2024 (can have multiple of same type)
Transferring	Transfer between providers freely — do NOT withdraw and re-deposit (this uses allowance)
Flexible ISAs	Allow withdrawals and replacements in the same tax year without using more allowance
Death	ISA loses tax-free status on death, but APS (Additional Permitted Subscription) lets spouse/civil partner inherit the allowance
Residency	Must be a UK resident (or Crown servant) to contribute
Age	Must be 18+ for Stocks and Shares ISA; 16+ for Cash ISA

Common ISA Mistakes

Mistake	Why it matters
Not using your allowance	You lose it at the end of the tax year — £20,000 of tax-free potential gone
Withdrawing and redepositing	Unless it’s a flexible ISA, this uses your allowance twice
Keeping too much in cash long-term	Inflation erodes the real value — investments typically beat cash over 10+ years
Ignoring platform and fund fees	High fees compound — a 1% fee difference can cost tens of thousands over decades
Not transferring old ISAs	You can transfer to get better rates without losing tax-free status
LISA withdrawal penalty	25% penalty effectively costs you your bonus plus extra

ISA Allowance Checklist — Before 5 April

Task	Priority
Check how much allowance you’ve used this tax year	High
Top up Cash ISA, Stocks and Shares ISA, or LISA	High
Transfer old Cash ISAs to better rates	Medium
Open a JISA and contribute for children	Medium
Review investment ISA performance and fees	Annual
Consider LISA contribution if first-time buyer or under 40	If applicable