UK ISA Allowance (2026/27)
The Individual Savings Account allowance for 2026/27 is £20,000, split however you choose across Cash, Stocks and Shares, Innovative Finance and Lifetime ISAs (with a £4,000 sub-limit on the Lifetime ISA). Junior ISAs get a separate £9,000 cap. ISAs are entirely outside UK Income Tax and Capital Gains Tax.
ISA limits for 2026/27
| Account type | Annual limit | Withdrawal rules |
|---|---|---|
| Cash ISA | £20,000 shared | Any time |
| Stocks and Shares ISA | £20,000 shared | Any time |
| Innovative Finance ISA | £20,000 shared | Subject to platform |
| Lifetime ISA (LISA) | £4,000 of the £20k | First home or age 60 |
| Junior ISA (JISA) | £9,000 separate | Child takes control at 16, can withdraw at 18 |
ISA tax treatment
- Interest, dividends, and capital gains within an ISA are exempt from Income Tax and CGT.
- ISA income does NOT count against the £500 Dividend Allowance or £1,000/£500 Personal Savings Allowance.
- ISA withdrawals are entirely tax-free at any time (subject to LISA rules).
- ISAs sit outside Self Assessment - no need to declare anywhere on your tax return.
- On death, an ISA can be inherited by a spouse / civil partner via the Additional Permitted Subscription, preserving the tax-free wrapper.
Lifetime ISA worked example
A 25-year-old contributing the LISA maximum £4,000 a year for 25 years (to age 50) gets a 25% government bonus on each year's contribution - £1,000 a year free. Total contributions £100,000, total bonus £25,000, plus investment returns. The fund is locked until age 60 (or earlier for a first home up to £450,000).
The 25% withdrawal penalty for non-qualifying withdrawals before 60 is harsher than it sounds: contributing £1,000 + £250 bonus = £1,250, then withdrawing with 25% penalty = £937.50 back. Net loss vs the original £1,000 contribution is £62.50, or 6.25%.
Frequently asked questions
- What is the UK ISA allowance for 2026/27?
- The annual ISA allowance is £20,000 for 2026/27 - unchanged from 2017/18 onwards (the longest frozen period in the ISA's history). You can split the £20,000 across any combination of Cash ISA, Stocks and Shares ISA, Innovative Finance ISA and Lifetime ISA, subject to the £4,000 sub-limit on Lifetime ISA contributions.
- Can I have multiple ISAs of the same type from April 2024?
- Yes. The ISA Bill 2024 removed the previous one-per-tax-year restriction on Cash ISAs and Stocks and Shares ISAs - from 6 April 2024 onwards a saver can open and contribute to multiple ISAs of the same type within the same tax year, subject to the overall £20,000 allowance. Lifetime ISA contributions still count toward the overall allowance plus the £4,000 LISA sub-limit.
- What is the Lifetime ISA?
- A Lifetime ISA (LISA) allows up to £4,000 of contributions per year between ages 18 and 50. The Government adds a 25% bonus on contributions (up to £1,000 per year), payable annually. LISA funds can be withdrawn penalty-free for a first home purchase up to £450,000, or from age 60. Withdrawals for any other reason before age 60 attract a 25% government penalty - which actually amounts to a 6.25% loss on contributions (because the 25% bonus is calculated on the contribution then 25% is taken back from the new total).
- How does the Junior ISA work?
- A Junior ISA (JISA) is opened by a parent or guardian for a child under 18, with an annual allowance of £9,000 in 2026/27 (unchanged since 2020/21). The child takes control at age 16 and can withdraw funds at 18. JISA contributions do not count toward the adult £20,000 ISA allowance - they are a separate cap.
- Are ISA gains and interest taxable?
- No - all interest, dividend income, and capital gains within an ISA are exempt from UK Income Tax and Capital Gains Tax. Withdrawals are tax-free. ISAs are also outside the £500 Dividend Allowance and £1,000/£500 Personal Savings Allowance limits - sheltering income that would otherwise be taxed if held in a general investment account.
- What is the ISA "flexible" feature?
- A flexible ISA (offered by some providers) allows withdrawals to be replaced within the same tax year without affecting the £20,000 allowance. For example, depositing £20,000 then withdrawing £5,000 then re-depositing £5,000 still leaves you within allowance. Non-flexible ISAs treat any re-deposit as new subscription, eating into remaining allowance.