What is the ISA allowance for the 2025/2026 tax year?

Understanding your finances is a key step towards building a sense of security and freedom. One of the most powerful tools for savers and investors in the UK is an individual savings account (ISA), which allows you to grow your money free from UK tax. For the 2025/2026 tax year, the overall ISA allowance is £20,000.

This guide will give you a clear and simple overview of what that allowance means for you. We’ll cover the core rules, the different types of accounts, and recent changes that make saving even more flexible. Our goal is to empower you with the knowledge to make smart choices for your wealth and gain true peace of mind.

 

The £20,000 allowance: the main rules

The total amount you can save or invest across all your adult ISAs for the tax year running from 6 April 2025 to 5 April 2026 is £20,000. It’s a single, generous allowance that you can split across different types of ISAs.

Remember the most important rule: the allowance operates on a ‘use it or lose it’ basis. If you don’t use your full £20,000 allowance by the end of the tax year on April 5, 2026, that portion of your allowance will be gone forever. It does not roll over to the next tax year. This makes it vital to have a plan for your money.

 

Different ISAs, different opportunities

Your £20,000 allowance can be split between various types of ISAs. Each one is designed for a specific purpose, offering you the freedom to tailor your financial strategy to your personal goals.

• Cash ISA: This is a popular choice for straightforward, tax-free savings. It is ideal for short-term goals or an emergency fund, as your money is easily accessible. You can put up to the full £20,000 into a Cash ISA.
• Stocks & Shares ISA: If you’re looking for long-term growth and are comfortable with a little more risk, this ISA allows you to invest in a wide range of assets, including stocks, bonds, and funds. The full £20,000 allowance can also be used here.
• Lifetime ISA (LISA): A LISA is designed to help first-time buyers or those saving for retirement. You can save up to £4,000 each tax year, which counts towards your overall £20,000 limit. The government then adds a generous 25% bonus on your contributions, giving you up to an extra £1,000 each year.
• Junior ISA (JISA): A JISA allows you to save on behalf of a child. The allowance for a JISA is £9,000 for the 2025/2026 tax year. This is a separate allowance and does not affect your personal £20,000 limit.

 

New rules to maximise your flexibility

The financial landscape is always evolving, and recent changes have made ISAs more flexible than ever. These updates give you greater control over your finances.

Since April 6, 2024, you are no longer limited to opening just one of each type of ISA in a single tax year. This new rule allows you to open and contribute to multiple ISAs of the same type (e.g., two Cash ISAs) simultaneously.

This is great news, as it gives you the opportunity to find the best rates or investment options without being locked into a single provider.

Another welcome change is the new ability to make partial transfers of money from a single tax year’s contributions. This means you can move a portion of your ISA savings to another provider to get a better deal, without having to transfer the entire balance. This newfound freedom puts you in the driver’s seat.

Finally, the minimum age to open a Cash ISA is now 18, bringing it into line with other adult ISAs.

 

Your financial opportunity

The ISA allowance is more than just a number – it’s a powerful opportunity to build wealth and secure your future. By understanding and using your allowance, you are making a proactive choice to build a foundation of financial stability and independence.

Whether you choose a simple Cash ISA or a more complex mix of accounts, the act of saving tax-free is a pragmatic step towards a brighter financial future.

Now that you are empowered with this knowledge, you can approach the 2025/2026 tax year with confidence, taking control of your financial destiny and achieving peace of mind.

 

If investing, capital at risk. All investing should be long term. The value of your investments can go up and down, and you may get back less than you invest. 

A 25% government penalty applies if you withdraw money from a Lifetime ISA for any reason other than buying your first home (up to £450,000) or for retirement, and you may get back less than you paid into your Lifetime ISA.

Tax treatment depends on individual circumstances and may be subject to change in the future.