How the ISA allowance works in 2026/27
Last updated:
An ISA is a savings or investment account where you pay no tax on the interest, income or gains. In 2026/27 you can pay in up to £20,000 across all your ISAs. You must be 18 or over and resident in the UK to open one.
How the £20,000 splits
There are four types: cash ISAs, stocks and shares ISAs, innovative finance ISAs and Lifetime ISAs. You can put the whole £20,000 in one account or split it across several, including more than one of the same type. The one exception is the Lifetime ISA: you can only pay into one in a tax year, and no more than £4,000.
The allowance runs from 6 April to 5 April. You can take money out of an ISA at any time without losing the tax benefits, though your provider may have its own rules or charges.
Lifetime ISA rules
- You must be 18 or over but under 40 to open one.
- You can pay in up to £4,000 a year until you are 50.
- The government adds a 25% bonus, up to £1,000 a year.
- The £4,000 counts towards your £20,000. It is not on top.
You can take the money out without a charge to buy your first home, once you are 60 or over, or if you are terminally ill. For a first home, the property must cost £450,000 or less, you must buy with a mortgage, and you must buy at least 12 months after your first payment into the account.
Any other withdrawal has a 25% charge on the amount taken out. That is more than the bonus. Save £800 and the bonus makes it £1,000. Withdraw it all and the charge is £250, leaving £750. You get back £50 less than you put in.
The Cash ISA change from April 2027
From 6 April 2027, people under 65 will only be able to pay £12,000 a year into cash ISAs. The overall allowance stays at £20,000, so the rest can still go into a stocks and shares, innovative finance or Lifetime ISA. People aged 65 and over keep the full £20,000 for cash.
The regulations were laid before Parliament on 14 September 2026 and come into force on 6 April 2027. They include rules to stop people getting round the lower cash limit. Nothing changes for 2026/27, which is the year this calculator covers.
Worked examples
Using the whole allowance
You pay £10,000 into a cash ISA, £6,000 into a stocks and shares ISA and £4,000 into a Lifetime ISA. That is £20,000, so you have £0 left. The Lifetime ISA earns a £1,000 bonus.
Using part of it
You pay in £5,000 to cash, £5,000 to stocks and shares and £4,000 to a Lifetime ISA. That is £14,000, leaving £6,000 you can still pay in before 5 April.
Trying to put £6,000 in a Lifetime ISA
Only £4,000 is allowed, which earns the full £1,000 bonus. The other £2,000 would have to go into a different type of ISA. You would have £16,000 of allowance left for that.
Common questions
Can I have more than one ISA?
Yes. You can hold and pay into several, as long as the total paid in during the tax year stays within £20,000.
Is the Lifetime ISA limit on top of the £20,000?
No. Pay £4,000 into a Lifetime ISA and you have £16,000 left for other ISAs.
What happens to a Lifetime ISA when I turn 50?
You can no longer pay in or earn the bonus. The account stays open and your savings still earn interest or investment returns.
Do I need to put ISA interest on my tax return?
No. You do not declare ISA interest, income or gains.
Where these figures come from
See gov.uk for Individual Savings Accounts, Lifetime ISAs and the reduction in the cash ISA limit.