ISA Allowance Rules Explained: A Simple UK Guide

What an ISA is

An Individual Savings Account (ISA) is a type of account with its own HMRC tax rules. Interest, dividends and gains inside an ISA are generally free of Income Tax and Capital Gains Tax in the usual ISA sense (MoneyHelper / GOV.UK — high-level only). Investments can still fall in value.

Who can open an adult ISA is set on GOV.UK — typically age 18+ and UK resident (with Crown servant exceptions). Lifetime ISAs also have age rules. Junior ISAs for under-18s follow separate rules.

An ISA is not a single brand. Providers offer Cash ISAs, Stocks & Shares ISAs and other types under the rules. To compare Cash ISA rates, see AER explained.

The annual allowance for 2026/27

For tax year 2026 to 2027, the overall maximum you can subscribe to ISAs is £20,000 (source: GOV.UK).

The tax year runs 6 April to 5 April.

You can put the whole amount in one ISA or split it across more than one (GOV.UK “How ISAs work”). Check live GOV.UK wording for how many accounts of each type you can pay into in a year — do not rely on memory.

Unused allowance does not normally roll over to the next tax year (source: MoneyHelper).

ISA types compared

This table is general information. It doesn’t suggest any type is better than another. Fee detail for Stocks & Shares ISAs sits in Stocks & Shares ISA fees.

How the allowance is shared, and how transfers differ

Sharing the pot

All adult ISA subscriptions in the tax year share one £20,000 ceiling.

For example, if you pay £4,000 into a Lifetime ISA in 2026/27, up to £16,000 of your allowance may remain for other ISA types that year — always confirm remaining room with your providers and GOV.UK.

GOV.UK says you can only pay into one Lifetime ISA in a tax year.

Transfers vs new subscriptions

• New subscription: fresh money that uses this year’s allowance.
• ISA transfer = moving existing ISA money between providers or types under transfer rules — this often does not use up new allowance the same way as a fresh deposit (MoneyHelper / GOV.UK; follow live guidance, not hearsay).

Partial transfers and timing rules exist. Use your provider’s transfer process and GOV.UK’s guidance rather than doing it yourself. Don’t withdraw the cash yourself: ask your new provider to run an official ISA transfer so you keep the tax-free status.

See also: How to transfer an ISA: start with the new provider (it is not a withdrawal)

Closing an ISA, withdrawing cash, then paying back in can interact badly with the allowance. Treat that as a high-level warning and check official guidance before you act.

New money vs transfers: the short version

Illustrative scenario

Sam has £20,000 available to place during 2026/27. Sam considers splitting between a Cash ISA and a Stocks & Shares ISA, and also wonders about a Lifetime ISA’s £4,000 yearly subscription and bonus rules.

Questions Sam might check:

• How much of the £20,000 is still unused across providers?
• If a Lifetime ISA takes £4,000, how much room is left for other ISAs?
• For Cash ISA deposits, which firm holds the cash and how FSCS might apply (£120,000 from 1 December 2025)?
• For Stocks & Shares, fees and the fact that investments can fall as well as rise?

Sam reads GOV.UK and MoneyHelper. If Sam is still unsure about a large or complex decision, a regulated adviser can help.

The catch

When to check GOV.UK, HMRC and MoneyHelper

• GOV.UK Individual Savings Accounts and How ISAs work for allowance and eligibility
• MoneyHelper for plain-English ISA explainers
• Your provider for remaining allowance reporting and transfer forms

This page is general information. Complex transfers, Lifetime ISA first-home rules or large portfolios may need regulated advice.

Key takeaways

• Announced 2027 Cash ISA changes are not current 2026/27 law.
• Check GOV.UK and MoneyHelper; this is not personalised advice.
• More guides: ISAs, Savings, AER explained, Stocks & Shares ISA fees.

Related reading

FAQ

Can I put the full £20,000 into a Stocks & Shares ISA in 2026/27?

Yes. For 2026/27, the overall allowance is £20,000, and you can use it in one ISA or split it across several (source: GOV.UK). Don’t confuse this with the Cash ISA changes announced for 2027, which aren’t in force yet.

Does a Lifetime ISA use part of my £20,000?

Yes. Lifetime ISA subscriptions (up to £4,000 in a tax year) count inside the overall £20,000 pot.

Does transferring an ISA use my allowance?

Often not. A proper ISA transfer doesn’t usually use new allowance in the way a fresh subscription does, but rules and timing matter. Check GOV.UK and both providers.

Is Cash ISA money protected by FSCS?

Eligible cash deposits with authorised firms may be covered by FSCS up to £120,000 per person per firm from 1 December 2025. That is separate from Stocks & Shares ISA investments, which can fall in value and are not the same as a deposit guarantee.

Do I lose unused allowance at the end of the tax year?

Unused allowance does not normally roll over. Confirm on MoneyHelper / GOV.UK.

Are the April 2027 Cash ISA announcements already applying?

No. During 2026/27 they are not current law. Check GOV.UK closer to April 2027 for anything that later comes into force.

Disclaimer