ISA Allowance 2026/27: £20,000 Tax-Free Limit and Account Types
ISA allowance 2026/27: the £20,000 limit across cash, stocks and shares, innovative finance and Lifetime ISAs, Junior ISAs, transfers and the April 2027 cash limit.
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.
2026/27 ISA limits at a glance
Adult ISA total
£20,000
Across all adult ISA types combined
Lifetime ISA cap
£4,000
Within £20k limit + 25% gov bonus
LISA max bonus
£1,000
Government top-up per year
Junior ISA per child
£9,000
Separate from £20k adult allowance
4 adult ISA types compared
| Type | Holds | Risk | Limit | Typical use |
|---|---|---|---|---|
| Cash ISA | Bank and building society savings, some NS&I products | Low - FSCS £120k per bank | £20k | Short-term savings |
| Stocks & Shares ISA | Shares, funds, corporate and government bonds | Market risk | £20k | Long-term investing |
| Lifetime ISA | Cash or stocks and shares; open at 18 to 39 | As underlying + 25% gov bonus | £4k | First home (£450,000 or less) or age 60+ |
| Innovative Finance ISA | Peer-to-peer loans, crowdfunding debentures, cryptoasset ETNs | High - not FSCS deposit protection | £20k | Higher-risk lending |
Holdings per gov.uk. The FSCS deposit protection limit rose from £85,000 to £120,000 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 | Assumed rate |
|---|---|---|---|---|
| £100 | £6,977 | £16,388 | £46,204 | 6% |
| £250 | £17,443 | £40,970 | £115,510 | 6% |
| £500 | £34,885 | £81,940 | £231,020 | 6% |
| £1000 | £69,770 | £163,879 | £462,041 | 6% |
| £1667 (~max £20k/yr) | £116,307 | £273,187 | £770,222 | 6% |
Paying in the full £20,000 a year for 20 years at the assumed 6% gives £770,222. Inside the ISA no Income Tax or Capital Gains Tax is due on that growth. Outside it, the tax depends on how the return arrives (interest against the Personal Savings Allowance, dividends against the £500 Dividend Allowance, gains against the Capital Gains Tax annual exempt amount) and on your band, so this page does not put a single figure on it.
Flexible ISA rules
If your ISA is flexible, you can take cash out and put it back in during the same tax year without reducing your allowance. gov.uk's worked example:
- Your allowance is £20,000 and you pay £10,000 into an ISA during the 2026 to 2027 tax year.
- You then take out £3,000.
- Flexible ISA: you can still pay in £13,000 that year (the remaining £10,000 plus the £3,000 you took out).
- Non-flexible ISA: you can pay in £10,000 (just the remaining allowance).
Whether an ISA is flexible is up to the provider, and your provider can tell you. The Lifetime ISA has its own withdrawal rules and charge.
Lifetime ISA deep dive
The Lifetime ISA is for a first home or later life, with a 25% government bonus. Rules below are from gov.uk/lifetime-isa.
- Open at 18 or over and under 40; pay in until 50; withdraw without charge at 60+, for a first home, or if terminally ill with less than 12 months to live.
- £4,000 per tax year cap, within your £20k overall ISA limit. 25% bonus = £1,000 max per year.
- First-home use: the property must cost £450,000 or less, be bought at least 12 months after your first payment, through a conveyancer or solicitor, and with a mortgage (not a private mortgage from a relative or spouse).
- Later life: withdrawals from age 60 are free of the charge.
- 25% withdrawal charge on any other withdrawal, applied to the amount taken out including the bonus. On £5,000 that is £1,250, leaving £3,750: 6.25% less than the £4,000 you paid in.
- Reform: Budget 2025 announced a consultation on a new, simpler ISA for first-time buyers, to be offered in place of the Lifetime ISA once available.
Related calculators and guides
- Maximum pension contribution calc - the pension annual allowance side.
- Dividend tax calculator - dividends outside an ISA and the £500 Dividend Allowance.
- Salary sacrifice 2026/27 - pension contributions through your employer.
- Higher-rate tax 40% guide - where the Personal Savings Allowance halves.
- £100k tax trap - the Personal Allowance taper zone.
- Child Benefit tax charge - HICBC and adjusted net income.
- UK State Pension guide - the retirement income that ISAs supplement.
- Pension tax relief guide - how pension relief works.
Frequently asked questions
What is the ISA allowance for 2026/27?
£20,000 - the total you can pay into ISAs of all types in the 2026/27 tax year (6 April 2026 to 5 April 2027). It is per person, so two people can each pay in £20,000. The limit has been £20,000 since 2017/18 (up from £15,240), and Budget 2025 confirmed the ISA, Lifetime ISA and Junior ISA limits stay where they are until 5 April 2031. The proposed British ISA was dropped at Autumn Budget 2024. Junior ISAs have a separate £9,000 limit per child that does not count toward the adult allowance.
How is the £20,000 split across different ISA types?
Your choice. The £20,000 can go into any mix of cash ISAs, stocks and shares ISAs, innovative finance ISAs and a Lifetime ISA. Since 6 April 2024 (SI 2024/350) you can pay into more than one ISA of the same type in a tax year, but only one Lifetime ISA, and no more than £4,000 into it. gov.uk's example: £10,000 in one cash ISA, £3,000 in another cash ISA and £7,000 in a stocks and shares ISA. From 6 April 2027, savers aged 64 or under at the end of the tax year can put no more than £12,000 into cash ISAs; the overall £20,000 stays the same.
What is the Lifetime ISA (LISA) bonus worth?
The government adds 25% to what you pay in, up to £1,000 a year on the £4,000 maximum: pay in £4,000 and £1,000 is added. You must be 18 or over but under 40 to open one, and can pay in until 50. You can withdraw without a charge to buy a first home costing £450,000 or less, from 60, or if terminally ill. Any other withdrawal costs 25% of the amount taken out, which recovers more than the bonus: on £5,000 the charge is £1,250, leaving £3,750, 6.25% less than you paid in. Paying the maximum for 10 years means £40,000 in plus £10,000 of bonus, before growth. Budget 2025 said a new first-time-buyer ISA will replace the Lifetime ISA once available.
What is the Junior ISA (JISA) allowance?
£9,000 per child per tax year, the level since 2020/21 (it was £4,368 in 2019/20). It is separate from the adult allowance. Anyone can pay in, but the £9,000 is the total across the child's cash and stocks and shares Junior ISAs. The money belongs to the child: they can take control at 16 but cannot withdraw until 18, when the account automatically becomes an adult ISA. Until 5 April 2024, 16 and 17 year olds could also open an adult cash ISA; from 6 April 2024 the minimum age is 18 (SI 2024/350), with an exception for those who were already 16 or 17 on 5 April 2024.
What is a "flexible ISA" and why does it matter?
A flexible ISA lets you take cash out and put it back in the same tax year without it counting again against your allowance. gov.uk's example: pay in £10,000, 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 each provider chooses whether to offer, so check before withdrawing.
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, but the rest is taxed as income when drawn, and you normally cannot draw before 55 (57 from 6 April 2028). ISA money goes in after tax and comes out tax-free at any age. A higher-rate taxpayer who expects to pay basic rate in retirement typically gains from the pension; the ISA wins on access. The allowances are separate: £60,000 pension annual allowance and £20,000 ISA allowance. See our max pension contribution calculator for the pension side.
What happens to my ISA if I die?
For deaths on or after 6 April 2018 the ISA becomes a "continuing account of a deceased investor" and 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. No new payments can go in, and it still counts toward the estate for Inheritance Tax. A surviving spouse or civil partner can inherit an extra ISA allowance on top of their own £20,000, of up to the value of the ISA at death or its value when closed. Stocks and shares can be transferred to the survivor's ISA only if they use the same provider.
Can I transfer ISAs between providers?
Yes. gov.uk says you can transfer all or part of your ISA savings, made this year or in earlier years, to another provider and to the same or a different ISA type, without using any 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, and providers may charge.
Are ISAs really tax-free? What about CGT and dividend tax?
For UK tax, yes. No Income Tax is due on interest or investment income inside an ISA and no Capital Gains Tax on gains, and you do not need to declare any of it on a tax return. ISAs still count toward your estate for Inheritance Tax. The rules are in the Individual Savings Account Regulations 1998 (SI 1998/1870), made under Chapter 3 of Part 6 of ITTOIA 2005 and s.151 TCGA 1992. HMRC's statistics put the market value of adult ISA holdings at £952 billion at the end of 2024/25, and the number of adult ISA holders at 23 million in 2023/24.
Should I open my ISA on 6 April or wait until the end of the tax year?
For investments, money paid in earlier in the year has longer to grow, so a lump sum on 6 April 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 budgets. For a cash ISA, interest starts from the day you pay in.
What is the Help to Buy ISA? Is it still open?
No - 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 from a Lifetime ISA to a Help to Buy ISA triggers the 25% withdrawal charge.
What about the Personal Savings Allowance and Dividend Allowance?
They are separate allowances for savings and investments outside an ISA. The Personal Savings Allowance (ITA 2007 s.12B) is £1,000 of interest for a basic-rate taxpayer, £500 for a higher-rate taxpayer and nothing for an additional-rate taxpayer. The Dividend Allowance (the dividend nil rate in ITA 2007 s.13A, inserted by Finance Act 2016) is £500, reduced to that level from 2024/25 by Finance Act 2023. A basic-rate saver whose interest is under £1,000 pays no tax on it anyway, so a cash ISA saves nothing that year. ISAs matter more for higher and additional-rate taxpayers, larger balances, and investors whose dividends and gains would exceed the allowances. See our dividend tax calculator for dividends outside an ISA.