ISA allowance explained — annual limits, types and tax benefits

The ISA allowance is the maximum amount that can be saved or invested into Individual Savings Accounts (ISAs) in each tax year (6 April – 5 April), currently £20,000 for adults (2024–25). All growth, interest and income within an ISA is tax-free.

Types of ISA

• Cash ISA: savings account — interest paid tax-free
• Stocks and Shares ISA: investments — growth and dividends tax-free
• Lifetime ISA (LISA): up to £4,000/year, government adds 25% bonus; must be used for first home (under £450,000) or retirement
• Innovative Finance ISA: peer-to-peer lending — higher risk, higher potential return

Key rules

The £20,000 allowance cannot be carried forward — unused allowance from 2024–25 is lost on 5 April 2025. You can split the allowance across multiple ISA types in the same year. Track your ISA contributions with our free tax year planner.