ISA Allowance Tracker 2025/26

How the £20,000 ISA Allowance Works in 2025/26

Every UK resident aged 18 or over has an annual ISA allowance of £20,000 for the 2025/26 tax year (6 April 2025 to 5 April 2026). An ISA — Individual Savings Account — lets you save or invest money without paying income tax on interest or capital gains tax on investment growth. The £20,000 limit has remained unchanged since 2017/18. You can spread your allowance across four main ISA types: Cash ISA, Stocks and Shares ISA, Innovative Finance ISA (IFISA), and Lifetime ISA (LISA), in any combination. Since April 2024, HMRC allows you to subscribe to multiple ISAs of the same type in a single tax year — for example, you can now hold two Cash ISAs with two different providers simultaneously. Any unused allowance cannot be carried forward to the following tax year, so it is worth planning contributions before 5 April 2026.

Lifetime ISA Bonus: How to Claim the 25% Government Top-Up

The Lifetime ISA is one of the most generous savings vehicles available to eligible UK savers. If you are aged 18 to 39, you can open a LISA and contribute up to £4,000 per year. HMRC adds a 25% government bonus on top, up to a maximum of £1,000 per year. This means a £4,000 contribution becomes £5,000 inside your LISA. The bonus is paid monthly by HMRC. You can use your LISA to buy your first home (property valued at £450,000 or under) or withdraw the funds from age 60 for retirement. If you withdraw for any other reason before age 60, a 25% withdrawal charge applies — this effectively claws back the entire government bonus and a small portion of your own money. Opened between ages 18 and 39, the LISA can be contributed to up to age 50. Your £4,000 LISA contribution counts toward your overall £20,000 ISA annual allowance.

Junior ISA: Saving for Children Tax-Free

A Junior ISA (JISA) is a separate tax-free savings account for children under 18. For 2025/26, the JISA allowance is £9,000. This is entirely separate from the adult ISA allowance — contributing to a child's JISA has no impact on the parent's own £20,000 annual limit. Parents, guardians, or anyone else can contribute to a JISA on behalf of the child, as long as the total does not exceed £9,000 in the tax year. The child cannot access the funds until they turn 18, at which point the JISA automatically converts into an adult ISA. Both Cash JISAs and Stocks and Shares JISAs are available. Starting a JISA early and investing regularly can compound to a substantial nest egg by the time the child reaches adulthood.

ISA Types at a Glance: Which Is Right for You?

Choosing the right ISA depends on your goals, timeline, and tax situation. Cash ISAs are ideal for short-term savings where capital protection matters — interest is paid tax-free. Stocks and Shares ISAs are suited to long-term wealth building, as dividends and capital gains are sheltered from tax. The IFISA allows lending through peer-to-peer platforms with tax-free interest, but carries higher risk. The Lifetime ISA offers the highest effective return through the 25% government bonus, but is restricted to first-home purchase or retirement after 60. In all cases, your combined contributions must not exceed £20,000 per tax year. Below is a quick comparison of all ISA types for 2025/26.