When does the 2026/2027 ISA year start?
The 2026/2027 ISA year starts on 6th April 2026, which means that from this date, you have a fresh allowance that can be invested tax-free. But if you’re thinking of putting money into an ISA (Individual Savings Account) to save or invest tax-efficiently, it’s important to be aware of the different ISA allowances. These dictate how much money you’re allowed to contribute to your account every year.
What is the tax-free ISA allowance?
The tax-free ISA allowance is the maximum amount of money you can contribute to an ISA account every tax year. In the UK, the tax year runs from the 6th of April to the 5th of April the following year.
You can choose to split your ISA allowance across different types of ISAs (e.g. Cash ISA, Stocks and Shares ISA, Lifetime ISA, etc.) or invest it all in one type of ISA. However, you can only contribute to one of each type of ISA per tax year.
What are the current ISA allowances?
For the 2026/2027 tax year, the ISA allowances are:
- Cash ISA – £20,000 (this will be reduced to £12,000 in 2027)
- Stocks and Shares ISA – £20,000
- Innovative finance ISA – £20,000
- Lifetime ISA – £4,000 (contributions into a Lifetime ISA count towards your £20,000 Stocks and Shares ISA, Cash ISA, or Innovative Finance ISA annual allowance)
- Junior ISA – £9,000
The key takeaway here is that adults in the UK generally have an annual ISA allowance of £20,000. However, if one makes a contribution to a lifetime ISA, this counts towards that £20,000 allowance.
The pros and cons of ISA allowances
ISA allowances today are quite generous. The ability to save or invest up to £20,000 per year tax-free can really be helpful when building wealth for the future.
One downside to ISA allowances, however, is that you can’t carry them over to the next tax year. If you don’t use your ISA allowance in a specific tax year, that allowance is gone forever.
Historical ISA allowances
ISA allowances haven’t always been as high as they are today. In the past, they were a lot lower.
For example, for the 2000/2001 tax year, the total ISA allowance was £7,000 while the Cash ISA allowance was just £3,000.
Only in the 2017/2018 tax year was the allowance for both Stocks and Shares ISAs and Cash ISAs increased to £20,000.
Can you have a Cash ISA and a Stocks and Shares ISA?
The answer to this is yes. However, if you make a contribution to a Cash ISA, this will reduce the amount that you can put into a Stocks and Shares ISA.
For example, if you were to put £5,000 into a Cash ISA, you would only be able to contribute £15,000 to a Stocks and Shares ISA that tax year.
Can you pay into more than one investment ISA in a single year?
Yes, you can. For example, if you are eligible for a Lifetime ISA, you can pay into this as well as a Stocks and Shares ISA.
You can only contribute to one of each type of ISA per tax year, however. So, for example, you can only contribute to one Stocks and Shares ISA per year.
ISA allowance tips
If you are keen to make the most of the various ISA allowances available, here are some tips:
- Consider contributing on behalf of your spouse – Every adult currently has a £20,000 annual ISA allowance. This means that a couple can potentially contribute up to £40,000 per year into ISAs
- If you are planning to invest a large amount of money, consider investing it over several tax years so that you can invest more tax-free within an ISA. For example, by investing £20,000 in an ISA in late March – before the ISA deadline – and £20,000 in an ISA in mid-April – after the ISA deadline – you could potentially invest £40,000 tax-free within a month
- If you have maxed out your own ISA allowance as well as your spouse’s ISA allowance, you may want to consider making contributions to Junior ISAs on behalf of your children.
What happens to your ISA allowance if you make a withdrawal?
The implications of taking money out of an ISA depend on whether your ISA is flexible or not.
With a flexible ISA, you can take out money and replace it in the same tax year without the replacement contribution counting towards your annual allowance.
By contrast, with a non-flexible ISA, if you make a withdrawal and then put the money back into your account, the contribution will be classed as a subscription and will count towards your annual ISA allowance.
Currently, flexibility is only offered for Cash ISAs, Innovative Finance ISAs, and cash held within Stocks and Shares ISAs.
What happens to ISA allowances if you die?
If you die, your spouse or civil partner can inherit a one-off additional ISA allowance. This is known as the Additional Permitted Subscription (APS), and it is equal to either the value of your ISA on the day you die or the value on the day the ISA account is closed – whichever is higher.
What is the ISA deadline?
The ISA deadline is the last day that you can contribute to an ISA for that tax year. It falls on 5th April every year. The first day you can start investing in a new ISA is on the 6th April 2026.
Based in London, Edward is a distinguished investment writer with an extensive client portfolio comprising a diverse array of prominent financial services firms across the globe. With over 15 years of hands-on experience in private wealth management and institutional asset management, both in the UK and Australia, he possesses a profound understanding of the finance industry.
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