ISA Allowance Explained UK

ISA allowance explained (UK)

For the 2026/27 tax year (6 April 2026 to 5 April 2027), the overall adult ISA allowance is 20,000. That is the most you can subscribe across eligible adult ISAs in the year. Unused allowance does not roll into the next tax year. Cash, Stocks and Shares, Innovative Finance and Lifetime ISA subscriptions all count toward that £20,000. Junior ISAs have a separate childs limit and sit outside the adult pot.

Lifetime ISA subscriptions are capped at £4,000 a year, and that £4,000 uses part of your £20,000. You can open a Lifetime ISA from 18 until you turn 40 and keep paying in until 50 (GOV.UK). The government adds a 25% bonus on eligible payments, up to £1,000 a year; MoneyHelper’s framing is that the bonus itself does not use the £20,000 subscription limit. LISA withdrawal rules are separate and can include penalties outside eligible first-home or age withdrawals.

Since 6 April 2024 you can subscribe to more than one ISA of the same type in a year, as long as you stay within the overall limit, though you can still only pay into one Lifetime ISA per tax year. You normally need to be 18 or over to open an adult ISA. Transitional Cash ISA access for some 16–17s ended on 5 April 2026; under-18s generally use a Junior ISA. ISAs cannot be held jointly.

If your provider offers a Flexible ISA, you can withdraw money and replace it in the same tax year without that replacement eating extra allowance. GOV.UK’s example idea: pay in £10,000 then withdraw £3,000, and a flexible account may let you pay in another £13,000 that year — without flexibility you may only have £10,000 of room left. Flexible ISA rules do not apply to Junior or Lifetime ISAs.

Transferring an ISA keeps money inside the tax-free wrapper when you move provider or, where allowed, type. Withdrawing the cash yourself and paying into a new ISA as a fresh subscription is different — GOV.UK warns you generally cannot treat that withdrawn amount as free extra subscription room the way a proper transfer would. Cash-to-cash transfers are expected within 15 working days; other transfers within 30 calendar days.

Interest outside an ISA may be covered by the Personal Savings Allowance: up to 1,000 for many basic-rate taxpayers, £500 for higher-rate and £0 for additional-rate (GOV.UK). Interest and gains inside an ISA do not use your PSA. For some early-career savers with modest cash balances, PSA may already cover interest outside an ISA; larger pots and longer-term wrapping are a separate personal choice.

From 6 April 2027, government plans (Autumn Budget 2025 / GOV.UK ISA reform factsheet) would keep the overall 20,000 limit but cap Cash ISA subscriptions at £12,000 for under-65s, while 65+ keep a £20,000 Cash limit. Other announced measures include anti-circumvention rules for cash-like holdings in non-Cash ISAs and a ban on transferring non-Cash ISAs into Cash ISAs for under-65s. Those changes are planned, not the current 2026/27 rules — re-check GOV.UK before planning around them.

Sprault helps you organise accounts, track savings goals and see how ISA contributions fit beside the rest of your money. Sprault provides planning tools and educational information only — not regulated financial advice or product recommendations.