Published: 26 January 2024
What’s an ISA allowance?
Think of an ISA (Individual Savings Account) as a special piggy bank where the money you put in can earn interest tax-free*. But there’s a limit on how much you can save in this piggy bank each year – this is your annual ISA allowance.
You can split your allowance across different types of ISAs, such as Cash ISAs, Stocks and Shares ISAs, Innovative Finance ISAs and Lifetime ISAs. Each type of ISA caters to different financial needs and goals, but the one thing they have in common is that you don’t have to pay tax on the interest or growth that you earn in them.
What is the ISA allowance for 2025/2026?
The ISA allowance for the 2025/26 tax year is £20,000. As mentioned above, you can use this across multiple ISAs.
When does your ISA allowance reset?
The ISA allowance lasts for a full tax year, starting from 6 April one year and ending on 5 April the next year. Each tax year, you get a fresh ISA allowance. If you don’t use it all by l the end of the tax year, you can’t carry it over – so if you don’t use it, you will lose it!
Will transferring an ISA use your allowance?
Worried about moving your ISA savings around? Don’t be.
Shifting your money from one ISA to another doesn’t use up any of your yearly allowance, as long as it’s done as an official ISA transfer.
But be aware, if you take the money out and then put it back into an ISA, it will count towards your limit (unless you have an ISA that offers flexible withdrawals so you can replace the amount withdrawn without using additional allowance).
Read more about ISA transfers >
How many ISAs are you allowed?
You can open multiple types of ISA every tax year – so Cash ISAs, Stocks and Shares ISAs, and so on. But remember, all your ISA savings added together shouldn’t go over your annual ISA allowance of £20,000.
However, you can only open one Lifetime ISA, which has a £4,000 annual contribution limit and is only available to people aged 18 to 39.
What happens if you go over your ISA allowance?
If you accidentally go over your annual ISA limit, HMRC will get in touch and tell you what you need to do. You might have to take out the extra money, pay tax on the amount you’ve gone over or do something else to fix the problem.
ISAs are a great way to save some cash without having to pay any tax. Just keep an eye on those limits and rules, and you’re good to go!
The tax treatment depends on the individual circumstances of each customer and may be subject to change.
This guide is not to be taken as advice. You should seek independent financial or legal advice if needed. Cash ISAs are available to individuals aged 18 or over who are resident in the UK for tax purposes.
Last Updated: April 7th 2025
