ISA Allowance 2026/27: Limits, Junior ISA and the 2027 Cash Cap

In the 2026/27 tax year the overall UK ISA allowance is £20,000. Junior ISAs have a separate £9,000 limit, and you can put up to £4,000 into a Lifetime ISA within the £20,000 overall cap. From 6 April 2027 the annual cash ISA limit falls to £12,000 for people under 65, while savers aged 65 and over keep a £20,000 cash ISA limit inside the same overall allowance.

This guide walks through the 2026/27 limits, the four adult ISA types, Junior and Lifetime rules, and the planned cash ISA change. All figures come from GOV.UK. To split a £20,000 allowance across products, the percentage calculator helps you check shares quickly.

Contents

1. Overall ISA allowance for 2026/27
2. Junior ISA limit
3. Lifetime ISA rules and the £4,000 cap
4. Cash ISA limit change from 6 April 2027
5. How to split a £20,000 allowance
6. Choosing between cash and stocks and shares
7. Transfers, withdrawals and common mistakes
8. Practical tips before 6 April
9. FAQs

Overall ISA allowance for 2026/27

GOV.UK states that in the 2026 to 2027 tax year the maximum you can save in ISAs is £20,000. That overall subscription limit covers the adult ISA types you pay into during the year: cash, stocks and shares, innovative finance and Lifetime ISA contributions combined.

You must be 18 or over to open an adult ISA, and either UK resident or a Crown servant (or their spouse or civil partner) living abroad. You cannot hold an ISA jointly. Interest, dividends and capital gains inside an ISA are free of UK income tax and capital gains tax under the ISA rules. Confirm the current wording on the GOV.UK Individual Savings Accounts overview.

Providers may let you open more than one ISA of the same type in a year under current flexible rules, but your total subscriptions across all adult ISAs still cannot exceed £20,000. Always check how your provider reports subscriptions to HMRC before you split money between banks.

The tax year runs from 6 April to 5 April. Unused allowance does not roll forward. If you invest £12,000 by March and nothing else, the remaining £8,000 disappears on 6 April unless you use it first.

Providers must tell HMRC about subscriptions, so the £20,000 figure is a hard administrative limit rather than a soft target. If you accidentally over-subscribe, providers and HMRC have processes to remove the excess from the ISA wrapper, which can create a tax charge on returns that leave the wrapper. Keeping a simple spreadsheet of payments across providers avoids that problem when you use more than one bank or platform.

Flexible ISAs may allow you to withdraw money and replace it in the same tax year without using fresh allowance, but only if your provider offers flexibility and you replace funds in time. Not every cash ISA is flexible, so read the product key features before you treat an ISA like a current account.

Junior ISA limit

Junior ISAs are long-term, tax-free accounts for children under 18 who live in the UK (with limited exceptions for Crown servant families abroad). For 2026/27 the Junior ISA savings limit is £9,000. That limit is separate from the parent’s £20,000 adult allowance.

A child can hold one cash Junior ISA, one stocks and shares Junior ISA, or both. Parents or guardians with parental responsibility open and manage the account, but the money belongs to the child. The child can take control at 16 and can withdraw at 18, when the account usually becomes an adult ISA.

You cannot hold a Junior ISA and a Child Trust Fund at the same time. If a Child Trust Fund exists, the provider can transfer it into a Junior ISA on request. Official rules are on the Junior ISA GOV.UK page.

Grandparents and other adults can gift money into a Junior ISA that a parent manages, but those gifts still count toward the child’s £9,000 annual limit, not the donor’s adult ISA allowance.

Lifetime ISA rules and the £4,000 cap

A Lifetime ISA (LISA) helps first-time home buyers and people saving for later life. You can pay in up to £4,000 each year until you are 50, and you must make the first payment before you turn 40. The government adds a 25% bonus on contributions, up to £1,000 a year.

The £4,000 Lifetime ISA limit counts toward your £20,000 overall ISA allowance. If you use the full LISA room, you have £16,000 left for other adult ISAs in the same year. You can hold cash, stocks and shares, or a mix inside a Lifetime ISA.

Withdrawals for a first home or from age 60 can keep the bonus under the published conditions. Other withdrawals usually face a withdrawal charge that claws back the bonus and more, so treat a LISA as a product with rules, not a flexible rainy-day account. Details sit on the Lifetime ISA overview.

When you turn 50 you cannot add new money or earn new bonuses, but the account can stay open and continue to earn returns. Plan contributions in your forties if you still have unused annual room.

Cash ISA limit change from 6 April 2027

At Budget 2025 the government announced that from 6 April 2027 the annual cash ISA subscription limit for people under 65 will fall to £12,000 within the overall £20,000 ISA limit. People aged 65 and over will still be able to subscribe up to £20,000 a year in cash ISAs.

HMRC’s tax information and impact note, published 17 September 2026, confirms that change and sets out anti-circumvention rules. Those include restrictions on transfers from stocks and shares or innovative finance ISAs into cash ISAs, a 22% charge on interest paid on cash held in non-cash ISAs, and extra reporting for ISA managers. Read the note on Cash ISA limit reduction.

For 2026/27 you can still place the full £20,000 into cash ISAs if your provider allows it, subject to the overall limit. The £12,000 cash cap is a 2027/28 change. Savers who want a large cash buffer before the cap arrives may use 2026/27 allowance deliberately, then shift later subscriptions into stocks and shares ISAs.

The overall £20,000 adult limit remains. Under-65s who want to invest more than £12,000 from April 2027 will need to use non-cash ISA products for the balance, unless they are in the 65-and-over group that keeps the full cash room.

The policy objective stated in the impact note is to encourage greater retail investment and improve long-term returns for savers. Whether that suits you depends on your risk tolerance and when you need the money. Cash still has a place for near-term goals even after the 2027 change; the reform simply caps how much of each year’s allowance under-65s can place into cash ISAs.

How to split a £20,000 allowance

There is no single correct split. Emergency funds often sit in cash ISAs, while long-term goals sit in stocks and shares ISAs. A simple example: £6,000 cash, £10,000 stocks and shares, and £4,000 Lifetime ISA uses the full £20,000 and captures the LISA bonus on the last slice.

Percentages help when you think in shares rather than pounds. Forty per cent of £20,000 is £8,000; twenty per cent is £4,000. Use the percentage calculator linked above if you prefer to set rules such as “half in cash, half in investments” and then convert to pounds.

From 2027/28 an under-65 “emergency-first” plan that put £12,000 in cash would hit the new cash cap exactly, with £8,000 still available for investments inside the overall limit. A 65-plus saver could still put all £20,000 into cash under the announced rules.

Choosing between cash and stocks and shares

Cash ISAs suit money you may need soon or cannot afford to see fall in nominal terms. Stocks and shares ISAs suit longer horizons where investment risk is acceptable. Innovative finance ISAs involve peer-to-peer or similar products with their own risks and are less common for beginners.

ISA tax relief does not remove investment risk. A stocks and shares ISA can fall in value. Charges, platform fees and fund spreads all reduce returns, so compare products on net performance and service, not only on tax wrapper marketing.

If you are unsure how much of a windfall to shelter this year, list goals by time horizon first, then map each goal to cash or investments, then fill ISA room before taxable accounts where that matches your plan. GOV.UK explains eligibility and types; it does not recommend specific providers.

Transfers, withdrawals and common mistakes

Transferring an existing ISA to another provider should be done through an ISA transfer form, not by withdrawing cash and reopening a new account yourself. A cash withdrawal that you repay as a new subscription uses fresh allowance, whereas a proper transfer usually does not. Ask both providers how long the transfer will take and whether you will be out of market for stocks and shares holdings.

Partial transfers are allowed by many managers, but some products restrict them. If you hold a Lifetime ISA, confirm that the receiving provider can accept LISA transfers and protect any bonus correctly. Mistakes here are costly because of the Lifetime ISA withdrawal charge rules.

People also confuse the annual subscription limit with the total value of the account. Growth inside an ISA does not use allowance. Only new subscriptions in the tax year count. An account that started with £20,000 and grew to £25,000 still leaves you free to subscribe again next year up to the annual limit.

Another frequent error is paying into a stocks and shares ISA from a joint bank account without clear ownership records. ISAs are individual. Keep payments from an account in your name where possible, and keep confirmations of every subscription until you receive the year-end statement.

If you move abroad, residency rules can stop new subscriptions even when you keep existing ISA investments. Crown servants and their spouses or civil partners have specific exceptions. Check GOV.UK before you leave the UK if you still plan to pay in.

Practical tips before 6 April

Set a reminder for early March so unused allowance does not expire unused. Transfers between ISAs usually do not count as new subscriptions when done correctly through providers, but new money always does. Keep statements that show how much you subscribed in the year.

• Use LISA room deliberately if you expect to buy a first home or save to 60 under the scheme rules.
• Do not confuse Junior and adult limits. Funding a child’s Junior ISA does not use your £20,000.
• Plan for April 2027 if you are under 65 and habitually pay more than £12,000 a year into cash ISAs.
• Watch anti-circumvention rules from 2027 if you hold large cash balances inside stocks and shares ISAs.

This article reflects GOV.UK pages checked on 18 October 2026. Parliament can refine secondary rules before April 2027, so re-read the cash ISA reduction note before you lock in a multi-year cash strategy.

Couples often coordinate two £20,000 allowances for a household total of £40,000 of ISA room, but each person must subscribe from their own funds under the ISA rules. You cannot open a joint ISA. Transfers of money between spouses before subscribing still need to respect wider tax and anti-avoidance principles; for most families a straightforward gift followed by a personal subscription is the practical path.

Frequently asked questions

What is the ISA allowance for 2026/27?

The overall adult ISA allowance is £20,000 for the 2026 to 2027 tax year.

What is the Junior ISA limit in 2026/27?

£9,000. It is separate from the adult £20,000 allowance.

How much can I pay into a Lifetime ISA?

Up to £4,000 a year, which counts toward your £20,000 overall ISA limit. A 25% government bonus applies up to £1,000 a year.

What happens to cash ISAs in April 2027?

From 6 April 2027 the cash ISA annual limit becomes £12,000 for under-65s. Savers aged 65 and over keep a £20,000 cash ISA limit. The overall ISA allowance remains £20,000.

Can I open more than one ISA?

Yes, subject to provider rules, but total adult subscriptions in the tax year cannot exceed £20,000.

Do unused ISA allowances roll over?

No. Unused allowance ends on 5 April and does not carry forward.

Who can open an ISA?

Adults aged 18 or over who are UK resident, or certain Crown servants and their spouses or civil partners abroad. Lifetime ISAs also require you to be under 40 when you first pay in.

Are ISA gains tax free?

Qualifying interest, dividends and capital gains inside an ISA are free of UK income tax and capital gains tax under the ISA rules.

Last checked: 18 October 2026. Rates and rules can change, so confirm anything important with the official GOV.UK or NCSC source linked above.