INDIVIDUAL SAVINGS ACCOUNT (ISA)

ISAs (Individual Savings Accounts) allow you to earn interest on your savings or investments tax-free. The amount you can put into your ISA is capped for each tax year — for 2026/27 it's £20,000, unchanged since 2017/18 and confirmed frozen until at least 2030. You can choose to split your ISA allowance across different ISAs, and since April 2024 you can also pay into more than one ISA of the same type in the same tax year (for example, two different Cash ISAs with different providers), as long as your combined contributions stay within £20,000.

You can choose from a Cash ISA, Stocks & Shares ISA, Innovative Finance ISA (IFISA), and Lifetime ISA (LISA). There's also a Junior ISA to help you save for the kids. The Help to Buy ISA is no longer available to new applicants — it closed to new accounts back in November 2019 — though see below if you already hold one.

Cash ISA — a Cash ISA works like a savings account, only all the interest you earn is tax-free.

Stocks & Shares ISA — you can also use an ISA to earn tax-free returns on investments.

Innovative Finance ISA — allows you to earn tax-free interest by lending to people or businesses.

Help to Buy ISA (closed to new savers) — a type of Cash ISA that was made for first-time house buyers. If you already hold one, you can still pay in up to £200 per month and claim your government bonus, but the scheme stopped accepting new applicants from 30 November 2019. Existing holders can keep contributing until November 2029, and must claim their bonus by November 2030.

Lifetime ISA — for adults aged 18–50, you can save up to £4,000 a year (which counts within your overall £20,000 allowance), and the government adds a 25% bonus, up to £1,000 a year. It can be used to buy a first home worth up to £450,000, or accessed penalty-free from age 60 for retirement.

Junior ISA — if your child is under 18, you can open a Junior ISA (JISA) for them instead. The allowance is currently £9,000 per year, separate from and in addition to your own £20,000 allowance. You have a choice of Cash or Stocks & Shares, and you can divide the allowance between the two.

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