Individual Savings Accounts remain one of the simplest and most effective ways to shelter money from tax. Interest, dividends and capital gains inside an ISA are all completely tax free. No forms, no reporting, no tax to pay. You simply keep the money.
The 2026/27 allowances
| ISA type | 2026/27 limit | Notes |
|---|---|---|
| Cash ISA | Up to £20,000 | Bank, building society or National Savings |
| Stocks and shares ISA | Up to £20,000 | Shares, funds, bonds |
| Innovative finance ISA | Up to £20,000 | Peer-to-peer loans, certain instruments |
| Lifetime ISA | £4,000 (within the £20,000 total) | First home or retirement only. Must be 18 to 39 to open. |
| Junior ISA | £9,000 | Separate from the adult allowance |
The £20,000 annual limit applies across all ISA types combined. The Lifetime ISA has its own £4,000 sub-limit that counts against the overall £20,000.
What changed from April 2027
From the 2027/28 tax year, individuals under 65 will be capped at £12,000 in a cash ISA. To use the full £20,000 allowance, they will need to invest at least £8,000 in a non-cash ISA. Individuals aged 65 and over are not affected and can continue investing their full allowance in cash.
Why this matters now
If you want to maximise cash ISA contributions, 2026/27 is the last tax year in which you can invest the full £20,000 in cash without restriction. Some people with a preference for cash savings and no interest in equity investment may want to use the full allowance in cash this year before the cap takes effect in April 2027.
A practical example
John wants to invest £20,000 in ISAs in 2026/27. He puts £4,000 in his Lifetime ISA for retirement savings, £10,000 in a cash ISA and £6,000 in a stocks and shares ISA. His full allowance is used and all returns are tax free. From April 2027, if John is under 65 and wants to put the same £20,000 into ISAs, only £12,000 can go into cash. The other £8,000 must go into a non-cash product.
