UK ISA Allowance (2026/27): £20,000 Tax-Free Wrapper
UK ISA allowance 2026/27: £20,000 a year across all ISA types, the £4,000 Lifetime ISA cap, £9,000 Junior ISA, transfers, flexible ISAs and death.
Changing 6 April 2027: the cash ISA limit falls to £12,000 for savers aged 64 or under at the end of the tax year (those 65 or over keep £20,000), and a flat-rate charge (22%, per HMRC) applies to interest on cash held inside a stocks and shares or Innovative Finance ISA. The overall £20,000 allowance is unchanged. The regulations (SI 2026/1018) were made on 10 September 2026. What the HMRC note says.
Key 2026/27 ISA figures
Adult ISA total
£20,000
All adult ISA types combined
LISA cap
£4,000
Within £20k + 25% gov bonus
LISA max bonus
£1,000
Government top-up per year
Junior ISA per child
£9,000
Separate from £20k adult
ISA allowance history
| Tax year | Adult ISA limit |
|---|---|
| 2014/15 | £11,880 / £15,000 |
| 2015/16 | £15,240 |
| 2016/17 | £15,240 |
| 2017/18 | £20,000 |
| 2018/19 | £20,000 |
| 2019/20 | £20,000 |
| 2020/21 | £20,000 |
| 2021/22 | £20,000 |
| 2022/23 | £20,000 |
| 2023/24 | £20,000 |
| 2024/25 | £20,000 |
| 2025/26 | £20,000 |
| 2026/27 ← current | £20,000 |
Source: HMRC annual savings statistics, Table 1. In 2014/15 the limit was £11,880, raised to £15,000 part-way through the year. It has been £20,000 since 2017/18, and Budget 2025 keeps it there until 5 April 2031. Consumer prices rose about 34% between 2017 and 2025 (ONS CPI annual averages), so £20,000 set in 2017 would need to be about £26,770 in 2025 prices: in real terms the allowance has fallen by about 25%.
4 adult ISA types compared
| Type | Annual limit | Risk | Typical use |
|---|---|---|---|
| Cash ISA | £20k shared | Low (FSCS £120k per bank) | Short-term savings |
| Stocks & Shares | £20k shared | Market risk | Long-term investing |
| Lifetime ISA | £4k of £20k | As underlying | First home or age 60 |
| Innovative Finance | £20k shared | High (P2P loans, debentures) | Higher-risk lending |
The FSCS deposit protection limit rose from £85,000 to £120,000 per person per authorised bank from 1 December 2025 (Bank of England PRA policy statement).
ISA compounding at an assumed 6% a year
An illustration, not a forecast: monthly payments growing at a constant assumed 6% a year. Real returns vary year to year and can be negative.
| Monthly | 5 years | 10 years | 20 years |
|---|---|---|---|
| £100/mo (£1,200/yr) | £6,977 | £16,388 | £46,204 |
| £250/mo (£3,000/yr) | £17,443 | £40,970 | £115,510 |
| £500/mo (£6,000/yr) | £34,885 | £81,940 | £231,020 |
| £1,000/mo (£12,000/yr) | £69,770 | £163,879 | £462,041 |
| £1,667/mo (~£20k max) | £116,307 | £273,187 | £770,222 |
Paying in the full £20,000 a year for 20 years at the assumed 6% gives about £770k. Inside the ISA no Income Tax or Capital Gains Tax is due on that growth; outside it, how much tax you would pay depends on how the return arrives (interest, dividends or gains) and on your tax band.
ISA tax treatment summary
- No Income Tax on interest or investment income, and no Capital Gains Tax on gains, inside an ISA.
- ISA income does not use up the £500 Dividend Allowance or the £1,000/£500 Personal Savings Allowance.
- Withdrawals are tax-free at any time (Lifetime ISA withdrawals outside the permitted cases carry a 25% charge).
- No need to declare ISA interest, income or gains on a tax return.
- On death (from 6 April 2018): the ISA stays tax-free as a continuing account until closed, at most 3 years; a surviving spouse or civil partner can inherit an extra allowance.
- Inheritance Tax still applies: ISA investments form part of the estate.
Related
Frequently asked questions
What is the UK ISA allowance for 2026/27?
£20,000 per person per tax year, the level it has been at since 2017/18. Budget 2025 confirmed that the annual subscription limits stay at £20,000 for ISAs, £4,000 for Lifetime ISAs and £9,000 for Junior ISAs until 5 April 2031. The £20,000 can be split across cash, stocks and shares, innovative finance and Lifetime ISAs, with no more than £4,000 going into a Lifetime ISA. Junior ISAs have their own separate £9,000 limit per child. The proposed "British ISA" was dropped at Autumn Budget 2024. From 6 April 2027, savers aged 64 or under at the end of the tax year can put no more than £12,000 of the £20,000 into cash ISAs.
Can I have multiple ISAs of the same type in one tax year?
Yes, since 6 April 2024. The Individual Savings Account (Amendment) Regulations 2024 (SI 2024/350) allowed paying into more than one ISA of the same type in a tax year, as long as the total stays within the £20,000 allowance. The Lifetime ISA is the exception: gov.uk says you can only pay into one Lifetime ISA in a tax year, and no more than £4,000.
What is the Lifetime ISA (LISA)?
You must be 18 or over but under 40 to open one, and you can pay in up to £4,000 a year until you are 50. The government adds a 25% bonus, up to £1,000 a year. You can withdraw without a charge to buy a first home costing £450,000 or less (at least 12 months after your first payment, with a mortgage), from age 60, or if terminally ill with less than 12 months to live. Any other withdrawal costs 25% of the amount taken out, which recovers more than the bonus: £4,000 plus a £1,000 bonus is £5,000, and a 25% charge of £1,250 leaves £3,750, a 6.25% loss on what you paid in. Budget 2025 said a new first-time-buyer ISA will replace the Lifetime ISA once available, following a consultation.
How does the Junior ISA work?
A parent or guardian with parental responsibility opens it for a child under 18 living in the UK, and anyone can pay in up to £9,000 in total per child in 2026/27. A child can have one cash and one stocks and shares Junior ISA. The money belongs to the child: they can take control of the account at 16 but cannot withdraw until 18, when it automatically becomes an adult ISA. Junior ISA payments do not count toward any adult's £20,000 allowance. Since 6 April 2024 the minimum age for an adult cash ISA is 18, so 16 and 17 year olds can no longer open one alongside a Junior ISA (those who were 16 or 17 on 5 April 2024 could keep a single cash ISA).
Are ISA gains and interest taxable?
No UK Income Tax or Capital Gains Tax is due on interest, investment income or gains inside an ISA, and gov.uk says you do not need to declare ISA interest, income or gains on a tax return. ISA income does not use up your £500 Dividend Allowance or your Personal Savings Allowance, so those stay available for savings and investments outside the ISA. ISA holdings do form part of your estate for Inheritance Tax.
What is the flexible ISA feature?
If your ISA is flexible, you can take cash out and put it back in the same tax year without it counting again against your allowance. gov.uk's example: you pay £10,000 into an ISA, then take out £3,000. You can still pay in £13,000 that year if the ISA is flexible, but only £10,000 if it is not. Flexibility is a feature the provider chooses to offer, so check with yours before withdrawing.
What happens to my ISA when I die?
For deaths on or after 6 April 2018 the ISA becomes a "continuing account of a deceased investor": it stays free of Income Tax and Capital Gains Tax until the executor closes it, the estate administration completes, or 3 years after death, whichever comes first. It still counts toward the estate for Inheritance Tax. A surviving spouse or civil partner can also inherit an extra ISA allowance (an additional permitted subscription) on top of their own £20,000, of up to the value of the ISA at death or its value when closed. Ask the provider about the time limits for using it.
ISA vs SIPP - which is better for retirement saving?
It depends on your tax rate now and in retirement. Pension contributions get tax relief going in, and up to a quarter can usually be taken tax-free later, but the rest is taxed as income when you draw it and you cannot normally take it before 55 (57 from 6 April 2028). ISA money goes in after tax but comes out tax-free at any age. A higher-rate taxpayer who expects to be a basic-rate taxpayer in retirement typically gains from the pension route; the ISA wins on access. The two allowances are separate: the pension annual allowance is £60,000 of contributions and the ISA allowance is £20,000.
Can I transfer my ISA between providers?
Yes. gov.uk says you can transfer all or part of your ISA savings, from this year or earlier years, to another provider and to the same or a different ISA type, and a transfer does not use up your allowance. Ask the new provider to arrange it with an ISA transfer form: if you withdraw the money yourself, you cannot reinvest that part of your allowance. Transfers should take no longer than 15 working days between cash ISAs and 30 calendar days for other types. Lifetime ISA and Junior ISA transfers have extra restrictions.
Should I lump-sum at start of tax year or spread monthly?
For investments, money paid in on 6 April has longer to grow than money paid in later in the year, so a lump sum has a higher expected return if markets rise on average. At an assumed 6% a year, £20,000 invested a full year earlier would earn about £1,200 more. That is an assumption, not a forecast: returns vary and can be negative. Paying in monthly spreads the timing risk and suits many people's budgets. For cash ISAs, interest starts from the deposit date.
What is the Help to Buy ISA? Is it still open?
gov.uk says you can no longer open a Help to Buy ISA. If you have both a Help to Buy ISA and a Lifetime ISA, you can only use the government bonus from one of them to buy your first home. You can transfer money from a Help to Buy ISA into a Lifetime ISA, but moving money the other way triggers the 25% Lifetime ISA withdrawal charge.
What is the Personal Savings Allowance interaction with ISAs?
They are separate. Outside an ISA, the Personal Savings Allowance covers £1,000 of interest for a basic-rate taxpayer, £500 for a higher-rate taxpayer and nothing for an additional-rate taxpayer, and the Dividend Allowance covers £500 of dividends for everyone. A basic-rate saver earning less than £1,000 of interest pays no tax on it anyway, so a cash ISA saves nothing that year. An illustration for a higher-rate taxpayer: £100,000 of shares outside an ISA at an assumed 3% yield pays £3,000 of dividends; after the £500 allowance the rest is taxed at 35.75%, about £894 a year, plus any Capital Gains Tax on sales. Inside an ISA, none of that is due.