Understanding your ISA allowance
Understanding your ISA allowance
Your ISA allowance is the maximum amount you can pay into your ISAs during a single tax year. Understanding how ISA allowances work can help you make informed decisions about your savings and ensure you make the most of the tax-efficient benefits available through an ISA.
What is an ISA allowance?
An ISA allowance is the amount you can save or invest across eligible ISAs during a tax year.
The allowance is set by the Government and applies across all eligible ISA products combined. This means the total amount you pay into your ISAs during the tax year cannot exceed your annual allowance.
The tax year runs from 6 April to 5 April the following year.
If you're new to ISAs, read our guide: What Is an ISA and How Does It Work?
What is the current ISA allowance?
The current ISA allowance is £20,000 per person, per tax year.
You can choose to:
- Deposit the full £20,000 into one ISA
- Split your allowance across multiple ISAs
- Use only part of your allowance
The choice will depend on your savings goals and the types of ISA you wish to hold.
When does the ISA allowance reset?
The ISA allowance resets at the beginning of each tax year on 6 April.
Any unused allowance is generally lost at the end of the tax year and cannot normally be carried forward into the next tax year.
For example:
- You use £5,000 of your ISA allowance during the tax year
- The remaining £15,000 is unused
- When the new tax year starts, a new ISA allowance becomes available and the unused allowance is usually lost
This is why many savers review their ISA position before the end of the tax year.
Can I have more than one ISA?
Yes. You can hold multiple ISAs, provided you comply with the current ISA rules.
Many savers choose to spread their allowance across different ISA products depending on their needs and circumstances. For example, some people choose to save part of their allowance in a Cash ISA while using another portion elsewhere.
Does my ISA allowance include previous years' savings?
No.
Money already held within an ISA from previous tax years does not count towards your current year's allowance unless it is withdrawn and re-deposited in a way that falls within current ISA rules.
The allowance applies only to subscriptions made during the current tax year.
What happens if I don't use my ISA allowance?
If you do not use your ISA allowance before the end of the tax year, it will usually expire.
Unlike some tax allowances, unused ISA allowance cannot normally be carried forward. Once the tax year ends, a new allowance becomes available and any unused portion is typically lost.
Important changes for ISA savers
The Government has announced planned changes to Cash ISA subscription limits from 6 April 2027. While the overall ISA allowance currently remains £20,000 per person per tax year, some savers may be affected by future changes to Cash ISA subscription limits.
To understand what these changes could mean for ISA savers, read our guide: Upcoming ISA Changes Explained.
Common questions about ISA allowances
Can I save more than £20,000 in an ISA?
The total amount you can subscribe to eligible ISAs during a tax year is limited by the annual ISA allowance.
Do I have to use my full ISA allowance?
No. You can use as much or as little of your allowance as you wish.
Can I carry forward unused ISA allowance?
Unused ISA allowance generally cannot be carried forward into future tax years.
Is everyone entitled to an ISA allowance?
Eligibility depends on ISA rules and personal circumstances.
Does the ISA allowance apply to all my ISAs?
Yes. The annual allowance applies across all eligible ISAs you hold, rather than to each account individually.
In summary
Your ISA allowance is one of the most valuable features of an ISA. Understanding how it works can help you plan your savings effectively, make informed decisions throughout the tax year and take advantage of the tax-efficient benefits ISAs offer.
