The ISA allowance for the 2026-27 tax year is £20,000. That is the most an adult can pay into Individual Savings Accounts between 6 April 2026 and 5 April 2027, and it can go into a single account or be spread across several. Interest, dividends and investment gains inside an ISA are free of UK tax. At the Autumn Budget on 28 October 2026 the government also confirmed that the cash ISA limit will stay at £20,000, reversing a planned cut. All figures in this guide are as of October 2026.
What is the ISA allowance?
An ISA is not an investment in itself. It is a tax-free wrapper that sits around cash savings or investments. You do not pay tax on cash interest held inside it, or on income or capital gains from investments held inside it.
The annual allowance caps how much new money you can put in each tax year. According to GOV.UK, the limit for 2026-27 is £20,000. The tax year runs from 6 April to 5 April, and the allowance resets at the start of each one. HMRC’s guidance for ISA providers says unused allowance cannot be carried forward, so whatever you do not use by 5 April is lost.
Money you have already saved does not stop being tax-free when a new tax year begins. ISAs do not close at the end of a tax year, and your savings keep their tax-free status for as long as they stay in the account.
Who can open one
To open an adult ISA you must be 18 or over and resident in the UK. Members of the armed forces, Crown servants such as diplomats, and their spouses or civil partners can also open one while living abroad. The Lifetime ISA has an extra condition: you must be under 40 when you open it.
The four types of adult ISA
GOV.UK lists four kinds of ISA for adults. Your £20,000 covers all of them combined.
- Cash ISA: works like a savings account, but the interest is tax-free.
- Stocks and shares ISA: holds investments such as funds and shares. The value can fall as well as rise, but any income and gains are free of tax.
- Innovative finance ISA: the least common type. Check carefully how any provider works and what risks you would be taking before using one.
- Lifetime ISA: built for a first home or later life. You can pay in up to £4,000 a year until you turn 50, and the government adds a 25% bonus worth up to £1,000 a year. The £4,000 counts towards your £20,000 overall limit.
How to split your ISA allowance
You can put the whole £20,000 in one account or divide it. The GOV.UK example shows £10,000 in one cash ISA, £3,000 in a second cash ISA and £7,000 in a stocks and shares ISA, all in the same tax year. The only extra restriction is the Lifetime ISA: you can pay into just one in a tax year, with a maximum of £4,000.
Flexible ISAs
Some providers offer “flexible” ISAs. These let you withdraw cash and put it back within the same tax year without it counting again towards your allowance. HMRC guidance says flexibility is optional for providers and applies to cash only, and that Lifetime ISAs and Junior ISAs cannot be flexible. If you plan to dip into your savings, check your provider’s terms first.
More Read
What the Autumn Budget 2026 changed for ISAs
Chancellor John Healey’s Budget on 28 October 2026 made several changes that affect ISA savers.
The cash ISA limit stays at £20,000
In September 2026 HMRC published plans to cut the annual cash ISA limit to £12,000 for savers under 65 from 6 April 2027. A draft consultation on the rules said savers aged 65 or over would keep a £20,000 cash limit. The Budget 2026 document reverses that plan, so the cash ISA limit remains £20,000 for everyone.
A lower Lifetime ISA withdrawal charge
HM Treasury said the charge on unauthorised Lifetime ISA withdrawals is cut from 25% to 20% with effect from Budget day. The £450,000 property price cap is unchanged. When this guide was written, the GOV.UK Lifetime ISA guide still showed 25%, so check the current figure before you act.
The new rate matters because a 20% charge takes back roughly what the government added. Pay in £4,000 and the 25% bonus takes the total to £5,000. A 20% charge on £5,000 is £1,000, which leaves you with the £4,000 you put in. The Treasury says this means first-time buyers purchasing above the £450,000 cap will not be penalised.
A First Time Buyer ISA is on the way
The Budget confirmed a new First Time Buyer ISA as a simpler way to save for a deposit. The Treasury consulted on it between June and August 2026, and its consultation says the product will be offered in place of the Lifetime ISA once available. The bonus rate, subscription limits and launch date had not been published as of October 2026.
Higher tax on savings outside an ISA
From April 2027, income tax rates on savings income rise by a further two percentage points across all bands. That comes on top of a two-point rise already announced at Budget 2025. Interest earned inside an ISA is not affected. The Treasury also said it will work with industry on a new incentive for people investing in a stocks and shares ISA for the first time.
When you can take money out of a Lifetime ISA
According to GOV.UK, you can withdraw without a charge if:
- you are buying your first home for £450,000 or less, at least 12 months after your first payment, through a conveyancer or solicitor and with a mortgage
- you are aged 60 or over
- you are terminally ill with less than 12 months to live
Any other withdrawal is unauthorised and attracts the charge, which is now 20% after the Budget.
Junior ISAs for children
A Junior ISA is a separate allowance for children under 18 who live in the UK. The limit for 2026-27 is £9,000, and it can be held in cash, stocks and shares, or both. A parent or guardian with parental responsibility opens and manages the account, but the money belongs to the child. The child can take control at 16 and withdraw the money at 18. A child cannot hold both a Junior ISA and a Child Trust Fund, although a Child Trust Fund can be transferred into a Junior ISA.
Other rules worth knowing
- National Insurance number: HMRC says that from 6 April 2027, any ISA receiving a subscription will need a National Insurance number, or a declaration from the investor that they are not eligible for one.
- Savings outside an ISA: the Personal Savings Allowance lets basic-rate taxpayers earn £1,000 of interest tax-free, higher-rate taxpayers £500 and additional-rate taxpayers nothing. Some people on lower incomes can also use the starting rate for savings, worth up to £5,000.
- Protecting your cash: the tax wrapper is separate from deposit protection. You can read more in our report on changes to the savings protection limit.
For more on how households are building a cash buffer, see our report on gaps in “rainy day” savings.
Frequently asked questions
How much can I put in an ISA in 2026/27?
Up to £20,000 between 6 April 2026 and 5 April 2027, across all your adult ISAs combined. No more than £4,000 of that can go into a Lifetime ISA.
Is the cash ISA limit being cut to £12,000?
No. A cut to £12,000 for under-65s had been planned for April 2027, but the Autumn Budget 2026 dropped it. The cash ISA limit remains £20,000.
Can I pay into more than one cash ISA in a year?
Yes. GOV.UK’s own example shows two cash ISAs and a stocks and shares ISA used in the same tax year, provided the total stays within £20,000.
What is the Lifetime ISA withdrawal penalty now?
HM Treasury cut it from 25% to 20% from 28 October 2026. It applies to withdrawals other than for a qualifying first home, after age 60 or in terminal illness.
Does unused ISA allowance roll over?
No. Any allowance you do not use by 5 April is lost, although the money already in your ISAs stays tax-free.
This article is general information, not financial advice. Rules can change, so check GOV.UK or speak to a regulated adviser about your own circumstances.
Sources: GOV.UK, Individual Savings Accounts (ISAs) (accessed October 2026); GOV.UK, How ISAs work (accessed October 2026); HMRC, How to manage ISA subscriptions (accessed October 2026); GOV.UK, Withdrawing money from your Lifetime ISA (accessed October 2026); GOV.UK, Junior ISAs (accessed October 2026); HM Treasury, Budget 2026 (28 October 2026); HM Treasury, Budget 2026: Breathing space for today, hope for the future (28 October 2026); HMRC, Reduction in the cash ISA limit (17 September 2026); HMRC, The Individual Savings Account (Amendment) Regulations 2026 (16 July 2026); HM Treasury, First Time Buyer ISA consultation (23 June 2026); GOV.UK, Tax on savings interest (accessed October 2026).
