How Much Can You Put in an ISA Each Year?

Individual Savings Accounts (ISAs) are a specialized savings and investment vehicle in the United Kingdom, designed to offer tax efficiencies. These accounts allow individuals to save or invest money without incurring tax on interest, capital gains, or dividends. Understanding the contribution limits and rules is key to effectively utilizing these accounts.

The Annual Adult ISA Allowance

The ability to contribute to an Individual Savings Account is governed by an annual allowance, which resets with each new tax year. The UK tax year runs from April 6th of one year through to April 5th of the following year.

For the 2025 to 2026 tax year, the overall annual allowance for adult ISAs is £20,000. This amount represents the maximum an individual can contribute across most adult ISA types within that particular tax year. This allowance applies to the total amount paid into all ISAs combined, rather than to each separate ISA account held.

Any portion of the allowance that remains unused by the end of a tax year cannot be carried forward. Once April 5th passes, any unclaimed allowance from the preceding year is forfeited. A new £20,000 allowance becomes available at the start of the next tax year on April 6th. The allowance is set by the government and may be subject to future changes.

Allocating Your Annual Allowance

The annual adult ISA allowance of £20,000 can be strategically distributed across various types of adult Individual Savings Accounts. This flexibility allows individuals to tailor their savings and investment approach based on their financial goals and risk tolerance. The primary adult ISA types include the Cash ISA, Stocks & Shares ISA, and Innovative Finance ISA.

A Cash ISA holds cash savings, offering tax-free interest. A Stocks & Shares ISA permits investments in assets like shares, bonds, and investment funds, with any gains or dividends free from UK Income Tax and Capital Gains Tax. The Innovative Finance ISA (IFISA) allows individuals to invest in peer-to-peer (P2P) lending and debt-based securities, with interest earned also being tax-exempt.

The £20,000 annual allowance can be split in any combination across these ISA types, or the entire sum can be placed into just one type. For instance, an individual could deposit £10,000 into a Cash ISA and the remaining £10,000 into a Stocks & Shares ISA. Alternatively, the full £20,000 could be invested solely in a Stocks & Shares ISA.

While a Lifetime ISA also forms part of the overall £20,000 annual allowance, it carries its own specific sub-limit. Contributions made to a Lifetime ISA reduce the main £20,000 allowance, meaning if the maximum is contributed to a Lifetime ISA, the remaining amount available for other ISA types is reduced accordingly. As of April 2024, individuals can open and pay into multiple Cash ISAs or Stocks & Shares ISAs within the same tax year, provided the total contributions remain within the overall £20,000 limit.

Specific ISA Allowances and Rules

Beyond the main adult ISA allowance, certain ISA types have distinct contribution limits or particular rules.

The Junior ISA (JISA) is a long-term, tax-free savings account for children under 18. For the 2025 to 2026 tax year, the annual allowance for a Junior ISA is £9,000. This allowance is entirely separate from an adult’s ISA allowance, meaning contributions to a child’s JISA do not impact the parent’s or guardian’s own ISA limits. A child can hold both a Junior Cash ISA and a Junior Stocks & Shares ISA, but the combined contributions across both must not exceed the £9,000 limit in any given tax year.

The Lifetime ISA (LISA) helps individuals save for a first home or retirement. While contributions to a LISA count towards the overall annual adult ISA allowance, the LISA itself has a specific annual contribution limit of £4,000. To open a LISA, an individual must be aged 18 or over but under 40, and contributions can continue until their 50th birthday. The government adds a 25% bonus to savings in a LISA, up to a maximum of £1,000 per year.

The Help to Buy ISA (HTB ISA) is no longer open to new applicants, having closed on November 30, 2019. Individuals who opened an account before this date can continue to save into it until November 2029. Contributions to a Help to Buy ISA are limited to £200 per month, after an initial first payment of up to £1,000. The government provides a 25% bonus on savings in a Help to Buy ISA, which can be claimed towards the purchase of a first home.

Managing ISA Contributions and Transfers

Managing Individual Savings Accounts effectively involves understanding how contributions are processed and how transfers between accounts affect allowances.

Transferring existing ISA funds from one provider to another, or even between different types of ISAs, generally does not count towards the current year’s annual allowance. This rule applies to funds accumulated in previous tax years, allowing individuals to consolidate or switch providers without impacting their new annual contribution limit. If transferring contributions made in the current tax year, the entire amount contributed to that ISA type must typically be transferred in full. The process for transferring an ISA usually involves contacting the new ISA provider, who will then manage the transfer directly with the existing provider, preventing the individual from accidentally invalidating the tax-free status by withdrawing funds themselves.

Should an individual accidentally contribute more than the annual allowance, the excess amount will not qualify for tax relief. In such instances, the ISA provider or HM Revenue & Customs (HMRC) will notify the individual. The excess contributions may need to be removed from the ISA, and any interest or gains earned on that over-contribution could become subject to tax.

While it is possible to hold multiple ISAs from previous tax years, there are specific rules regarding new contributions within a single tax year. As of April 2024, individuals can pay into more than one of each type of ISA (Cash, Stocks & Shares, Innovative Finance), except for Lifetime ISAs, where only one can be paid into per tax year. The overarching rule remains that the total amount contributed across all ISAs in a given tax year must not exceed the overall annual allowance.