ISA calculator 2026/27
Project an ISA and see the tax it avoids. £20,000 allowance for 2026/27, £4,000 Lifetime ISA limit, 25% government bonus, worked year by year.
Year by year
Shown at the defaults above - £5,000 a year for ten years at an assumed 5%, basic rate. Change any input and the table follows.
| Year | Paid in | Bonus | ISA balance | Taxable equivalent |
|---|---|---|---|---|
| 1 | £5,000 | £0 | £5,250 | £5,250 |
| 2 | £5,000 | £0 | £10,763 | £10,763 |
| 3 | £5,000 | £0 | £16,551 | £16,551 |
| 4 | £5,000 | £0 | £22,628 | £22,613 |
| 5 | £5,000 | £0 | £29,010 | £28,917 |
| 6 | £5,000 | £0 | £35,710 | £35,474 |
| 7 | £5,000 | £0 | £42,746 | £42,293 |
| 8 | £5,000 | £0 | £50,133 | £49,385 |
| 9 | £5,000 | £0 | £57,889 | £56,760 |
| 10 | £5,000 | £0 | £66,034 | £64,430 |
What an ISA actually saves
Not the headline rate. What an ISA saves is whatever your interest would have cost above the Personal Savings Allowance, and for a lot of savers in a lot of years that is nothing at all. A basic-rate saver has £1,000 of interest a year tax-free outside any wrapper; a higher-rate saver has £500; an additional-rate taxpayer has none.
The saving arrives once the balance is large enough for the interest to clear that allowance. Paying in £5,000 a year for ten years at an assumed 5% as a higher-rate saver, the model above puts the ISA £4,833 ahead of the same money in a taxable account, of which £4,301 is tax paid and the rest is the growth that tax would have earned had it stayed invested. Change the assumption and that number changes with it, which is the point of exposing it rather than burying it.
There is a second saving that does not show up in any projection: an ISA balance stays sheltered in every future year, including the years when your income is higher and your allowance smaller. Allowance unused by 5 April is gone, and it does not carry forward.
The Lifetime ISA, and its charge
A Lifetime ISA pays a 25% government bonus on up to £4,000 a year, so up to £1,000 annually, and that sits inside the overall £20,000 allowance rather than on top of it. You must open one before turning 40, and payments stop at 50.
The charge applies to any withdrawal outside the three cases gov.uk sets out - buying a first home, being 60 or over, and terminal illness with less than 12 months to live - and it is the part worth doing the arithmetic on. gov.uk describes the 25% charge as recovering "the government bonus you received on your original savings", and on the same page's own numbers it takes a little more: £4,000 in, £1,000 of bonus, 25% of the resulting £5,000 is £1,250, and £3,750 comes back - which is £250 less than went in. See the Lifetime ISA guide for the first-home conditions and the property price cap.
What changes on 6 April 2027
The figures above are 2026/27 and correct for this tax year. One change is legislated for the year after - the Individual Savings Account (Amendment) (No. 2) Regulations 2026 (SI 2026/1018), made on 10 September 2026 and in force from 6 April 2027 - and it affects where the allowance can go rather than how big it is.
- Cash ISA limit falls to £12,000 for savers aged 64 or under at the end of the tax year. Savers aged 65 or over keep the full £20,000. The overall £20,000 ISA allowance is unchanged - HMRC's wording is that the cut applies "while retaining the overall ISA subscription limit of £20,000", so the remaining £8,000 has to go somewhere other than cash.
- A flat 22% charge on interest from cash held inside a non-cash ISA. That means cash deposits sitting in a stocks and shares ISA or an Innovative Finance ISA; the regulations set the charge at the savings basic rate, which HMRC gives as 22%. Separately, a stocks and shares ISA's non-cash investments must not be 100% Money Market Funds, and transfers from those accounts into a cash ISA are restricted for under-65s. These are anti-circumvention rules, and they reach further than the headline cut.
HMRC's impact note puts the scale of the main change in context: in 2022 to 2023, 78% of cash ISA subscribers aged under 65 paid in less than £12,000, so roughly one in five is affected at all. The note's Exchequer impact table is published empty, with the final costing subject to OBR scrutiny. Details in the news post on the cut.
What this model does not do
- It does not forecast. The growth rate is yours. A cash ISA rate is knowable for a year at a time and an investment return is not knowable at all, and no number on this page is a prediction of either.
- The taxable comparison is cash interest only. For a stocks and shares ISA, what the wrapper saves depends on how the return arrives - dividends against the dividend allowance, gains against the £3,000 Capital Gains Tax annual exempt amount - and this page does not assume a split it cannot know. The Capital Gains Tax calculator and the dividend tax calculator handle those directly.
- It assumes contributions at the start of each year and one growth rate throughout. Real contributions are monthly and real returns are not a straight line.
- It does not model inflation. Every figure is in today's pounds with no adjustment - see the inflation calculator for what a future balance is worth in present terms.
Frequently asked questions
How much can I put into an ISA in 2026/27?
£20,000, across all your ISAs added together rather than per account. gov.uk: "In the 2026 to 2027 tax year, the maximum you can save in ISAs is £20,000". You can split it however you like between a cash ISA, a stocks and shares ISA, an innovative finance ISA and a Lifetime ISA - but the Lifetime ISA has its own lower limit of £4,000 inside the total. The allowance does not carry forward: anything unused on 5 April is gone. 2026/27 is the last year with no separate cash limit: from 6 April 2027 a saver aged 64 or under at the end of the tax year can put only £12,000 of the £20,000 into cash ISAs, while savers aged 65 or over keep the full £20,000.
Is an ISA actually worth it if I only have modest savings?
It depends entirely on whether your interest would have been taxed at all. A basic-rate saver has a £1,000 Personal Savings Allowance, so interest below that costs nothing outside an ISA and the ISA wrapper saves nothing in that year. The calculation changes as rates rise, as the balance grows, or if you move into the higher-rate band where the allowance halves to £500 - and an additional-rate taxpayer has no allowance at all. An ISA is also permanent shelter: the balance stays tax-free in every future year, including years when your income is higher.
How does the Lifetime ISA bonus work?
gov.uk: "You can put in up to £4,000 each year, until you're 50" and "The government will add a 25% bonus to your savings, up to a maximum of £1,000 per year". You must make your first payment before you turn 40, and paying in stops at 50. The money is for a first home or for later life. Taking it out for anything else triggers a withdrawal charge, with three exceptions gov.uk lists: buying a first home, reaching 60, and terminal illness with less than 12 months to live. Withdrawals after death are also outside the charge.
What does the Lifetime ISA withdrawal charge actually cost?
gov.uk describes the 25% charge as recovering "the government bonus you received on your original savings". Work the arithmetic through and it takes slightly more than that: pay in £4,000, receive £1,000 of bonus, and a 25% charge on the resulting £5,000 is £1,250, leaving £3,750 - £250 less than you put in, before any growth. That is the number to weigh if there is a chance you will need the money for something other than a first home.
Do I pay Capital Gains Tax inside an ISA?
No. Gains and income inside an ISA are outside the tax system entirely, and there is nothing to report on a tax return. That is worth more than it once was, because the Capital Gains Tax annual exempt amount is now £3,000 - its level since 6 April 2024 - so a taxable portfolio produces reportable gains at a far lower level than it used to. The comparison on this page models cash interest only: for investments, what an ISA saves depends on how the return arrives, and this page does not assume a split it cannot know.
Can I pay into two cash ISAs in the same year?
Yes, since April 2024 you can pay into more than one ISA of the same type in a tax year, provided the total across all of them stays inside the £20,000 allowance. The Lifetime ISA is the exception that still binds separately, at £4,000. Transfers of money paid in during earlier years do not count against the current year's allowance at all.