🇬🇧 ISA Calculator (UK)

The five ISA types side-by-side — the master comparison

The UK runs five concurrent ISA wrappers, each with its own annual limit, eligibility rules and withdrawal terms. The £20,000 adult allowance is the umbrella; the Junior ISA (JISA) sits outside that umbrella with its own £9,000 cap for children under 18. The table below summarises the 2026/27 tax-year rules — figures are taken from GOV.UK Individual Savings Accounts and the GOV.UK Lifetime ISA guidance.

The four adult wrappers share a single £20,000 cap. Money paid into a Lifetime ISA counts against that £20,000 even though LISA contributions themselves cap at £4,000. The Junior ISA — opened on behalf of a child — sits in a separate £9,000 sleeve and never competes with the parent’s £20,000 allowance. For the deep-dive variant pages, see our dedicated Cash ISA growth calculator for real-return projections at current 4–5% rates, and our Stocks & Shares ISA calculator for long-horizon ETF growth modelling.

The £20,000 allowance — how it’s split, shared, and used in 2026/27

The £20,000 adult ISA allowance is a single annual budget shared across all your adult ISAs combined (Cash + Stocks & Shares + Innovative Finance + Lifetime ISA). It is per individual, not per household: a couple has £40,000 of combined allowance to deploy each tax year. The allowance does not roll over — if you contribute £12,000 in 2026/27, the unused £8,000 is gone permanently when the tax year closes on 5 April. The Junior ISA allowance (£9,000) is entirely separate and applies per child, not per parent.

Within the £20,000 envelope, the Lifetime ISA has its own carve-out: up to £4,000 of the £20,000 can go into a LISA, attracting a 25% government bonus of up to £1,000. The remaining £16,000 stays available for other ISA types. A 28-year-old saving for a first home might allocate £4,000 to a LISA (to bank the £1,000 bonus) and the remaining £16,000 to a Stocks & Shares ISA — that pair maxes both the LISA bonus and the wider tax-free wrapper in one tax year.

Two material rule changes landed on 6 April 2024 and remain in force for 2026/27, simplifying the wrapper considerably:

• Multiple ISAs of the same type, same tax year. Before April 2024, you could open only one Cash ISA and one Stocks & Shares ISA per tax year. Now you can open and contribute to multiple Cash ISAs and multiple S&S ISAs in the same year — useful for chasing introductory rates, splitting risk between platforms, or testing a new provider without losing access to your existing one. The single-LISA rule remains: you can only contribute to one Lifetime ISA per tax year.
• Partial transfers from prior-year subscriptions. Before 2024, transferring current-year ISA money meant transferring the entire current-year subscription. Now you can partially transfer prior-year ISA balances at any time without losing any allowance, and even partial-transfer current-year subscriptions in many cases. This is the technical fix that lets active savers chase the best Cash ISA rates without bricking their wrapper.

ISA decision tree — which one fits you

Six saver profiles cover most decisions. Pick the one closest to your situation; the recommended wrapper follows from the time horizon and the goal.

• Building an emergency fund (0–2 year horizon). Cash ISA, flexible variant. You need certainty of nominal value and same-day access. Stocks & Shares ISAs can drop 30–40% in a recession exactly when you need the money. See the Cash ISA growth calculator for current 4–5% rate projections.
• Saving for a deposit on a first home (3–7 year horizon, property ≤ £450k). Lifetime ISA, up to £4,000/year. The 25% bonus is the largest free-money lever in UK personal finance. Top up the rest of your £20,000 allowance in a Cash ISA if the purchase is within 5 years.
• Long-term retirement complement (10+ year horizon, already maxing workplace pension match). Stocks & Shares ISA, indexed global equities. Over 30 years, the equity wrapper roughly doubles the cash outcome on the same monthly contribution. See the Stocks & Shares ISA calculator for long-horizon modelling.
• Saving for a child’s 18th-birthday pot. Junior ISA, Stocks & Shares variant if >10 years to age 18. A child under 10 has the entire investment horizon ahead of them — the case for equity exposure is at its strongest.
• Higher-rate taxpayer chasing yield, already maxed pension + ISA + GIA. Innovative Finance ISA — with caution. Yields of 5–7% are possible on P2P loans, but the wrapper has a poor track record (see deep dive below) and capital is genuinely at risk. Not a starter ISA.
• Retired drawdown saver, age 60+ wanting tax-free top-up income. Stocks & Shares ISA, dividend-focused. A 4% sustainable withdrawal rate from a £500k ISA is £20,000/year of tax-free income — useful for supplementing State Pension without pushing into higher-rate tax bands.

Lifetime ISA deep dive — the £450k cap, the 25% bonus, and the penalty trap

The Lifetime ISA (LISA), launched in April 2017, is the only ISA wrapper that offers a direct cash bonus from the Treasury. The headline rules: open between ages 18 and 39, contribute up to £4,000 per tax year until age 50, receive a 25% government bonus on every contribution (so £4,000 in becomes £5,000 saved, paid monthly into the LISA account about 4–9 weeks after each contribution). The wrapper has two eligible uses: buying a first home priced at £450,000 or under, or withdrawing from age 60 onwards.

Worked example — maxing a LISA from age 25 to 50. Contribute £4,000 each tax year for 25 years (age 25 through 49 inclusive). Total personal contributions: £100,000. Total government bonus: 25 × £1,000 = £25,000. Combined annual saving: £5,000. At 5% real growth over 25 years (the long-run UK equity real-return assumption), the LISA pot reaches approximately £239,000 at age 50 — locked until age 60, then fully tax-free.

The 25% withdrawal penalty — doing the actual math. Withdrawing from a LISA for any reason other than a qualifying first-home purchase (price ≤ £450,000) or reaching age 60 triggers a 25% penalty on the withdrawn amount. The crucial detail: the penalty applies to the post-bonus balance, not the original contribution. Work an example. You contribute £1,000; the Treasury adds £250 bonus; balance is £1,250. You withdraw early; HMRC takes 25% of £1,250 = £312.50; you receive £937.50. Compared to the £1,000 you originally put in, you have lost £62.50 — a 6.25% net loss of your contribution, not 0%. The penalty does more than just claw back the bonus.

The £450,000 property cap — an increasingly binding constraint. The qualifying first-home purchase price cap of £450,000 has been unchanged since the LISA launched in April 2017. UK house prices have risen approximately 35–45% nominally since then (HMRC UK House Price Index); in London and the South East, the cap now excludes the median first-time buyer property in many boroughs. A LISA saver who tops up to £20,000 of bonus over five years and then finds their target property prices in at £455,000 must either renegotiate, contribute more cash to bring the LISA share under the cap, or withdraw with the 25% penalty — eating most of the bonus they accrued. The cap is a known design issue that successive governments have declined to address.

Age constraints — the hard dates. You must be 18 to 39 when you open a Lifetime ISA. Once open, you can contribute up to and including the day before your 50th birthday — the Treasury stops adding bonus on contributions after age 50. The wrapper itself stays open, growth continues tax-free, and you can withdraw penalty-free from your 60th birthday onwards. The 10-year gap between age-50 contribution stop and age-60 penalty-free withdrawal is the long-tail compounding phase.

Junior ISA deep dive — £9,000 a year, child-controlled at 18

The Junior ISA (JISA) replaced the Child Trust Fund in 2011 as the UK’s tax-free wrapper for children. The 2026/27 annual allowance is £9,000 per child, and the wrapper does not count against the parent’s £20,000 adult ISA limit — the two operate in parallel. Anyone can pay in (parents, grandparents, godparents, employers), but only the parent or legal guardian can open the account. The child controls the account from age 16, but cannot withdraw until they turn 18 — at which point the wrapper automatically converts into an adult ISA with full withdrawal rights.

JISAs come in two flavours: Cash JISA (a tax-free savings account with interest, typically 3–5% in 2026) and Stocks & Shares JISA (a tax-free brokerage holding funds and ETFs). A child can have one of each in the same tax year — the £9,000 cap applies across both combined. Transfers between providers and between Cash <-> Stocks & Shares variants are permitted without affecting the allowance.

Worked example — max JISA contributions from birth to age 18. A high-saving family contributes the full £9,000 every year from the child’s birth through to age 18 (18 contributions in total). Total personal contributions: £162,000. At a 5% real growth rate (Stocks & Shares JISA in a diversified equity ETF), the pot reaches approximately £253,000 at the child’s 18th birthday. That is an aggressive savings rate — only the top decile of UK households would max it consistently — but the figure illustrates the upper bound of JISA compounding power.

A more typical family contribution of £200/month (£2,400/year) from birth to 18 builds approximately £68,000 at the same 5% real rate — still a substantial leg-up for a university leaver. The JISA cannot be touched by the child until 18, which sidesteps the pre-uni temptation to dip into accumulating savings.

Innovative Finance ISA — what it is and why uptake collapsed

The Innovative Finance ISA (IFISA), launched in April 2016, lets retail savers hold peer-to-peer (P2P) loans inside the tax-free wrapper. Theoretically attractive: P2P platforms advertised yields of 5–7% net of platform fees, materially above prevailing Cash ISA rates, with the wrapper shielding all interest from income tax. In practice, the IFISA wrapper has been the worst performer of the five ISA types since launch — both in inflows and in retail outcomes.

Three high-profile platform failures between 2018 and 2020 broke retail confidence in the asset class: Collateral UK entered administration in February 2018; Lendy collapsed in May 2019 owing investors approximately £165 million; and FundingSecure went into administration in October 2019. Investors in these platforms faced capital losses of 50–90% on outstanding loans, with recovery proceedings still running years later. The IFISA tax wrapper offered zero protection against the platforms’ underlying credit losses — only the interest had been tax-sheltered, not the principal.

Following the failures and a 2019 FCA review that imposed tighter conduct standards on P2P, most major IFISA platforms have either closed to new retail investors (RateSetter, Funding Circle’s retail arm), been acquired by banks (Zopa converted to a digital bank in 2020), or pivoted to professional/institutional money only. IFISA inflows for 2024/25 were under £500 million across all platforms — about 0.7% of total ISA subscriptions, versus Cash ISA’s 60%+ share. Treat the IFISA as completeness coverage in this calculator; the realistic case for it as a core holding is weak. If you do use one, treat it as the higher-risk satellite within a portfolio, not the core.

Flexible ISAs — withdraw and redeposit without losing allowance

A flexible ISA is a variant Cash or Stocks & Shares ISA offered by some providers that lets you withdraw money and replace it later in the same tax year without using up fresh allowance. The feature is provider-specific — HMRC permits it, but not every bank or platform offers it. Always confirm with your provider before relying on the flexibility (most major Cash ISA providers do; Stocks & Shares ISA platforms vary, with newer fintech platforms more likely to support it).

Worked example. You have contributed your full £20,000 to a flexible Cash ISA in May 2026. In June, an unexpected boiler repair forces you to withdraw £5,000. In November, your annual bonus arrives and you redeposit £5,000 back into the same flexible Cash ISA before 5 April 2027. Net allowance impact: zero. The £5,000 redeposit does not count as a new subscription because it replaces a same-year withdrawal. Without the flexible feature, that same withdraw-and-redeposit would have permanently lost £5,000 of allowance (because the original £20,000 was already used and the £5,000 redeposit would have been refused).

Two crucial limits: the flexibility window resets at the end of each tax year (you cannot withdraw in March 2027 and redeposit in May 2027 without using new allowance); and the flexible withdraw-redeposit must be within the same ISA — you cannot withdraw from a flexible Cash ISA and redeposit into a flexible Stocks & Shares ISA without triggering normal subscription rules.

ISA transfers — the one rule that beats every alternative

The single most expensive ISA mistake is closing a prior-year ISA, withdrawing the money, and reopening one elsewhere. Doing that strips the wrapper status: every penny of the withdrawn money loses its tax-free shelter, and you would need fresh £20,000 allowance to rebuild — capped at £20k a year. The alternative — the official ISA transfer process — preserves the full wrapper value and is free at most major providers.

How an ISA transfer works. You contact the new provider (the one you are moving to) and complete their ISA transfer form, naming the old provider and the account number to transfer from. The new provider contacts the old provider directly; cash is moved between them (or stock if it’s an in-specie Stocks & Shares transfer); the wrapper status of every pound is preserved. HMRC’s code of conduct gives providers 15 working days for Cash ISA transfers and 30 for Stocks & Shares.

Transfers between ISA types are unrestricted in both direction and frequency: Cash → S&S, S&S → Cash, S&S → LISA (only up to the £4,000/year LISA contribution cap — the excess stays in S&S), and so on. Since April 2024, you can partially transfer prior-year ISA balances — previously, transferring current-year money required moving the entire current-year subscription, which discouraged active rate-shopping. The partial-transfer rule made it practical to chase the best Cash ISA rate quarter-by-quarter without bricking your wrapper.

30-year ISA compounding — the real-vs-nominal sensitivity

The ISA is structurally a long-term wrapper. The longer the runway, the more the £20,000 annual cap and the tax-free shelter compound into something materially different from a taxed General Investment Account. Two real-return scenarios bracket the realistic range for a 30-year horizon in 2026.

Maxed £20,000/year for 30 years — 6% real return (long-run global equities). Annual contribution £20,000; 30 contributions; real return 6% (the historical real return on global equities, approximately matching the FTSE All-World total return after UK CPI inflation). End-of-year-30 pot: approximately £1,581,000 in today’s money. Total personal contributions: £600,000. Real growth: £981,000 — tax-free.

Same inputs, 4% real return (mixed portfolio, 60/40 equity/bond, or low-cost diversified). End-of-year-30 pot: approximately £1,122,000. Same £600,000 contributions, but real growth drops to £522,000 — nearly half the previous scenario. The real-return sensitivity is dramatic: a 2-percentage-point reduction in long-run growth (from 6% to 4%) costs roughly £459,000 over 30 years on the same nominal contribution path. For more on real-vs-nominal returns and inflation drag, see the UK inflation impact calculator.

The mathematics of the wrapper itself is independent of return assumption — the ISA shelter never charges tax on interest, dividends or capital gains, no matter how big the pot grows. The same £1,581,000 pot held in a General Investment Account would, under 2026/27 rules, face capital gains tax at 18% (basic rate) or 24% (higher rate) on disposals above the £3,000 annual CGT allowance, and dividend tax of 8.75–39.35% on income above the £500 dividend allowance. The wrapper is the single largest tax shelter available to UK retail savers outside the workplace pension.

Inheritance ISA — the spouse APS rule

When an ISA holder dies, the surviving spouse or civil partner inherits a one-off Additional Permitted Subscription (APS) equal to the value of the deceased’s ISAs at death (or at the date the estate is finalised, whichever is higher). The APS sits on top of the survivor’s normal £20,000 allowance — not instead of it. If the deceased held a £150,000 ISA, the spouse can subscribe an extra £150,000 to their own ISA in addition to the £20,000 standard allowance, all retaining tax-free wrapper status.

The mechanics are easy to get wrong. The APS is a subscription allowance, not an automatic transfer — the surviving spouse must actively use it by subscribing fresh money (or transferring assets in-specie under the in-specie APS route) into their own ISA. Many bereaved spouses miss the deadline: the APS must be used within three years of death, or 180 days after estate administration completes, whichever is later. Major UK providers walk surviving spouses through the process if asked, but it is not automatic.

The APS does not change inheritance tax exposure — ISAs remain in the deceased’s estate for IHT purposes, only the wrapper status is preserved for the surviving spouse’s benefit. Couples with assets above the nil-rate band typically combine the APS with broader IHT planning (residence nil-rate band, gifting, life insurance trusts) to manage the overall estate exposure.