The £20,000 ISA Allowance: How to Use It Before 5 April

Your ISA allowance is £20,000 for the 2026/27 tax year, and whatever you don't use by 5 April disappears. You can't carry it forward, and from April 2027 the amount you can hold in cash drops to £12,000 if you're under 65. Here's how the allowance works and how to split it.

Last updated: 30 May 2026

Use it or lose it

An ISA (Individual Savings Account, a wrapper that shields your savings and investments from tax) gives you £20,000 of tax-free room each year. Every penny of interest, dividend, and growth inside it is yours, with nothing to declare and no tax to pay.

The catch is the deadline. The allowance runs with the tax year, from 6 April to the following 5 April. Anything you don't use by 5 April is gone. You can't bank it, and you can't add it to next year's £20,000. On 6 April the counter resets to a fresh £20,000 with nothing carried over.

That is why the run-up to April matters. Someone who pays in £500 a month uses £6,000 of their allowance over the year and lets £14,000 lapse. The room was there; it just expired unused.

Why 2026/27 is different: the cash ISA cut

For 2026/27 the full £20,000 can still go into a cash ISA. That changes on 6 April 2027. From then, savers under 65 can put a maximum of £12,000 a year into cash ISAs, down from £20,000. The announcement came in the November 2025 Budget, the first cut to the cash ISA limit since 2017.

A few details soften it. The overall ISA allowance stays at £20,000: the £8,000 you can no longer hold in cash can still go into a stocks and shares ISA instead. Savers aged 65 and over keep the full £20,000 cash limit. And money already sitting in a cash ISA is untouched. The change applies only to new contributions from April 2027 onward.

The practical point: 2026/27 is the last tax year an under-65 can shelter a full £20,000 in cash. If keeping a large cash buffer tax-free matters to you, this is the year to use that room.

Try the calculator

ISA Allowance Planner

Move the sliders to split your £20,000 across cash, stocks and shares, LISA and innovative finance. See what's left and how much LISA bonus you'd earn.

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The four types of ISA, and how the £20,000 splits

The £20,000 is one shared pot, not £20,000 per account. You can spread it across the four ISA types in any proportion you like, as long as the total stays within the allowance.

ISA type	2026/27 limit	What it's for
Cash ISA	£20,000*	Tax-free interest on savings
Stocks & shares ISA	£20,000	Tax-free growth and income from investments
Lifetime ISA	£4,000	First home or retirement, plus a 25% bonus
Innovative finance ISA	£20,000	Tax-free interest from peer-to-peer lending

*The £20,000 cash limit is for 2026/27. From 6 April 2027 it falls to £12,000 for savers under 65. All four types share the same £20,000 annual total.

A common split is some cash for money you'll need soon and a stocks and shares ISA for money you can leave alone for five years or more. For example, £8,000 in cash, £8,000 in a stocks and shares ISA, and £4,000 in a Lifetime ISA uses the full allowance and earns the LISA bonus on top.

The Lifetime ISA and its 25% bonus

The Lifetime ISA (LISA) is the one type with its own sub-limit. You can pay in up to £4,000 a year, and the government adds a 25% bonus on top. Put in the full £4,000 and HMRC pays £1,000 into the account, free money for a first home or retirement.

Your £4,000 counts toward the £20,000, but the £1,000 bonus does not. So a maxed LISA leaves £16,000 for your other ISAs and still hands you £1,000 extra. The rules that come with it:

Age limits. You can open a LISA between 18 and 39, and keep paying in until the day before you turn 50. After that it stays open and grows, but you can't add more.
First home or age 60. You can withdraw without penalty to buy your first home (priced up to £450,000) or once you reach 60.
The withdrawal charge. Take money out for any other reason and a 25% government charge applies to the whole withdrawal, including the bonus. On £1,000 withdrawn you'd pay back £250 and keep £750, so you can end up with less than you put in.

Money you leave invested in any ISA compounds tax-free year after year, which is where the long-run advantage shows up. The compound interest calculator shows what regular contributions and a given growth rate turn into over time.

Making the most of the deadline

Open before you fund

If you're close to 5 April, you can open an ISA and pay in a lump sum in the same session to lock in this year's allowance. Many providers let you add money first and choose where to invest it later, so you don't lose the room while you decide.

More than one ISA is now allowed

Since 6 April 2024 you can pay into more than one ISA of the same type in a year. That means you can chase the best cash ISA rate without closing last year's account, as long as your total contributions stay within £20,000.

Junior ISAs are separate

Children under 18 have their own allowance of £9,000 for 2026/27 through a Junior ISA. It's completely separate: paying into a child's Junior ISA does not touch your own £20,000.

Transfers don't use your allowance

Moving an existing ISA from one provider to another doesn't count as a new contribution, so it leaves this year's £20,000 untouched. Always use the provider's transfer process rather than withdrawing and re-paying, which would lose the tax-free status.

How much you can realistically pay in comes down to what's left after your bills and spending. If you're working that out from scratch, the 50/30/20 budget rule is a sensible starting point for how much of your take-home pay to direct at savings.

When you're ready to plan this year's split, open the ISA Allowance Planner and divide your £20,000 across the four types to see what's left and how much LISA bonus you'd pick up.

Frequently asked questions

What is the ISA allowance for 2026/27?

The ISA allowance is £20,000 for the 2026/27 tax year. That is the most you can pay into ISAs in one year, across all types combined. It resets on 6 April and you cannot carry any unused part forward.

Is the cash ISA limit really being cut?

Yes, but not yet. From 6 April 2027 the amount you can put into a cash ISA each year drops from £20,000 to £12,000 if you are under 65. Savers aged 65 and over keep the full £20,000 cash limit. Money already in a cash ISA is not affected, and the overall £20,000 ISA allowance stays the same. That makes 2026/27 the last year you can shelter a full £20,000 in cash if you are under 65.

Can I pay into more than one ISA in the same tax year?

Yes, since 6 April 2024. You can open and pay into more than one ISA of the same type in a single year, so two cash ISAs with different providers is allowed. The combined total across every ISA you hold still cannot go over £20,000.

Does the Lifetime ISA government bonus use up my allowance?

No. The 25% bonus is paid on top of what you contribute and does not count toward your £20,000. Your own LISA payments do count: put in the £4,000 maximum and you have £16,000 left for other ISAs, then HMRC adds £1,000 on top.

Is the ISA allowance different in Scotland?

No. ISAs are set by the UK government and the £20,000 allowance is identical across Scotland, England, Wales and Northern Ireland. Scottish income tax bands change what you pay on salary, but they have no effect on ISA limits or the tax-free treatment inside an ISA.

What happens to my allowance at the end of the tax year?

Any part of the £20,000 you have not used by midnight on 5 April is gone for good. There is no carry-forward and no grace period. On 6 April a fresh £20,000 allowance starts, with nothing rolled over from the year before.