Overview
The ISA allowance is the amount you can pay into Individual Savings Accounts in a single tax year. Interest, dividends and growth inside an ISA are free of Income Tax and Capital Gains Tax, and stay that way indefinitely — the allowance controls how much new money you can put in, not how much you can hold.
The rules are simple in outline and easy to get wrong in detail, particularly around what counts towards the limit and what does not.
Quick Answer (Read This First)
You can pay £20,000 into ISAs per tax year in total, not per account. The year runs 6 April to 5 April and unused allowance cannot be carried forward.
Only new money counts. Interest, growth, and transfers between ISA providers do not use any allowance. A Lifetime ISA is capped at £4,000 within the overall £20,000.
The £20,000 Limit Is Combined, Not Per Account
You can pay a total of £20,000 into ISAs in each tax year. That figure covers all ISA types added together:
- Cash ISA
- Stocks and Shares ISA
- Lifetime ISA (capped separately at £4,000 within the overall limit)
- Innovative Finance ISA
It is not £20,000 per ISA. Paying £15,000 into a Cash ISA leaves £5,000 for everything else, not another £20,000 for a Stocks and Shares ISA.
The Lifetime ISA has its own inner cap: a maximum of £4,000 per tax year, and that £4,000 counts towards the overall £20,000. So the largest possible split is £4,000 into a LISA and £16,000 across the other types.
The Cash ISA Limit Changes on 6 April 2027
The overall £20,000 allowance is staying, but from 6 April 2027 the amount of it you can put specifically into a Cash ISA is being cut for most people.
Announced at Autumn Budget 2025:
- Under 65: the Cash ISA limit falls to £12,000. The overall ISA allowance stays at £20,000, so the remaining £8,000 must go into a Stocks and Shares ISA, an Innovative Finance ISA, or a Lifetime ISA rather than cash.
- Aged 65 and over: the Cash ISA limit stays at £20,000, unchanged.
- Non-cash ISAs keep the full £20,000 limit for everyone.
The stated aim is to encourage retail investment, and the government has said anti-circumvention rules will accompany the change to stop the lower cash limit being sidestepped through non-cash wrappers.
IMPORTANT
The 2026/27 tax year is the last full year in which a saver under 65 can put the whole £20,000 into cash. If cash is where you want the money and you have the funds available, using the allowance before 6 April 2027 preserves it — money already inside a Cash ISA is not affected by the new limit, which applies to new subscriptions.
This does not change anything about how the allowance works today. Until 6 April 2027 the rules below apply in full.
The Tax Year, and Why It Cannot Be Carried Forward
The allowance runs from 6 April to 5 April. At midnight on 5 April, whatever you have not used disappears.
This is a use-it-or-lose-it allowance in the strictest sense. If you pay in £6,000 this tax year, next year's limit is still £20,000 — not £34,000. There is no carry-forward mechanism, no rollover, and no way to reclaim an unused allowance retrospectively. Our guide on why unused ISA allowance cannot be carried forward explains the statutory basis.
This asymmetry is why the weeks before 5 April see a rush of ISA subscriptions each year, and why paying in earlier in the tax year is generally better: the money spends longer inside the wrapper.
What Counts Towards the Allowance — and What Does Not
Only new money paid in during the tax year counts. This trips people up constantly.
Counts towards the £20,000:
- New cash you deposit
- Transfers in from a non-ISA account
Does not count:
- Interest, dividends or investment growth earned inside the ISA
- Money already held in ISAs from previous tax years
- Transfers between ISA providers, or between ISA types, where the money stays within the ISA wrapper
- Replacing money withdrawn from a flexible ISA in the same tax year
That third point is the important one. Moving an existing ISA to a better-paying provider is a transfer, not a new subscription, and does not consume any of your allowance — provided you use the provider transfer process rather than withdrawing the money yourself.
Flexible ISAs Change the Withdrawal Rules
Some Cash ISAs are designated "flexible". With a flexible ISA, money you withdraw can be replaced in the same tax year without using up allowance.
Withdraw £3,000 from a flexible ISA in June and pay it back in January, and your allowance is untouched. Do the same with a non-flexible ISA and the £3,000 you pay back is treated as a fresh subscription, consuming £3,000 of your £20,000.
Flexibility is a product feature, not a legal default. Providers choose whether to offer it, and many do not. Check before relying on it.
Holding More Than One ISA of the Same Type
The rules here changed materially on 6 April 2024.
Before 6 April 2024, subscribing to more than one ISA of the same type in a single tax year breached the ISA Regulations. HMRC would treat the second as a "disallowed combination" and repair it, stripping the tax protection from the offending subscription.
From 6 April 2024 onwards, paying into more than one ISA of the same type within a tax year is generally permitted. You could open two Cash ISAs with different providers and pay into both, as long as the combined total across everything stays within £20,000.
The overall limit did not change, and exceeding it remains a breach. Our guide on what happens if you have accidentally paid into two Cash ISAs covers both the pre- and post-2024 positions and how HMRC's repair process works.
IMPORTANT
The Lifetime ISA is an exception to the relaxed rules in practice: you can only pay into one LISA per tax year. It also carries age conditions — it can only be opened by someone aged 39 or under, with contributions permitted up to age 50.
Eligibility
To subscribe to an ISA you must be a UK resident for tax purposes and aged 18 or over for adult ISAs. Crown servants posted overseas and their spouses or civil partners are treated separately.
Non-residents can keep existing ISAs, and the money inside continues to grow tax-free, but cannot make new subscriptions until UK residence resumes. Junior ISAs operate under a separate, lower annual limit for under-18s.
What Happens If You Exceed the Limit
Exceeding £20,000 is a breach of the ISA Regulations rather than an offence. HMRC identifies over-subscriptions from the returns providers file and, in most cases, repairs the account by removing the excess and its tax protection. Any interest or growth attributable to the excess becomes taxable.
You generally do not need to contact HMRC proactively for a straightforward over-subscription — it will be picked up and corrected. What you should not do is withdraw and re-deposit money in an attempt to fix it yourself, which frequently makes the position worse.
Frequently Asked Questions
Looking for more on this topic? Browse all our savings guides.
Sources and Further Reading
This guide is based on UK primary legislation, regulator handbooks, and official guidance. The following sources cover the rules described above:
- Individual Savings Account Regulations 1998
- HM Revenue & Customs
- Income Tax (Trading and Other Income) Act 2005
- FCA Handbook — BCOBS (Banking: Conduct of Business)
Free, impartial money guidance is available from MoneyHelper, the government-backed service run by the Money and Pensions Service.
Related: Why Unused ISA Allowance Cannot Be Carried Forward | Accidentally Paid Into Two Cash ISAs? | All savings guides.
