ISA allowances explained
There’s a cap on the amount you can put in an ISA to reap the tax-free benefits. See how much you’re entitled to put away without having to pay tax on the returns.
There’s a cap on the amount you can put in an ISA to reap the tax-free benefits. See how much you’re entitled to put away without having to pay tax on the returns.
What’s an annual ISA allowance?
The Government sets a maximum amount every year that you’re allowed to save or invest into different types of Individual Savings Account (ISA). Because you don’t pay any Income Tax or Capital Gains Tax on any interest or profits you make from an ISA, the Government limits how much you can put into one. This is known as your ISA allowance or annual ISA subscription limit.
How much is the ISA allowance?
For the 2024/25 tax year, every adult has an ISA allowance of £20,000. This is unchanged from the ISA allowance of 2023/24.
You can use your £20,000 ISA allowance in one type of account, or split the allowance across some or all of the four available ISA types:
- Cash ISA
- Stocks and shares ISA
- Innovative finance ISA
- Lifetime ISA
What dates does the ISA allowance apply to?
The allowance applies to a tax year. In the UK, this runs from 6 April to 5 April the following year. So the 2024/25 ISA allowance runs from 6 April 2024 to 5 April 2025.
How much is the Junior ISA allowance?
The annual subscription limit for Junior ISAs for under-18s is £9,000 for the tax year 2024/25. This is unchanged from the previous tax year. Parents can pay into the ISA without it affecting their own ISA limit, but the money belongs to the child. The child can take control of the account when they’re 16, but can’t withdraw the money until they turn 18.
If your child is 16 or 17, they can take advantage of two ISA allowances – the junior ISA allowance and also the adult cash ISA allowance of £20,000.
What’s the annual Lifetime ISA allowance?
People who are under the age of 40 can open a Lifetime ISA and save up to £4,000 per year. Your Lifetime ISA allowance counts towards your full ISA allowance. You could save up to £4,000 in your Lifetime ISA, to gain the 25% top up from the Government. Then, if you’ve got more to save and invest, you could put up to £16,000 more into another type of ISA.
Is the ISA allowance different from the personal savings tax allowance?
Yes. These are two different tax allowances from the Government aimed at encouraging people to save and invest. The savings allowance is an amount of interest that you can earn without having to pay tax on it.
This is in addition to your ISA allowance, so you can use both. Unlike the ISA allowance, the savings allowance is different for people in different income tax bands. For basic rate taxpayers, it’s £1,000 in the tax year 2024/25.
If you’re lucky enough to earn more interest than your allowance level, you’ll have to pay Income Tax at your normal rate on any interest over your allowance.
Can I backdate or use my previous year’s ISA allowances?
No, you can’t roll over your ISA allowance to subsequent years.
How does taking money out of my ISA affect my allowance for the tax year?
Your ISA limit is based on what you pay in. As an example, if you used your full ISA allowance of £20,000 in a stocks and shares ISA, and later that tax year needed to withdraw money for something urgent, you wouldn’t be able to put back the money you’d taken out within your ISA yearly allowance.
But there is an exception to this. Some cash ISAs are flexible, meaning you can take out cash then put it back in during the same tax year, without reducing your current year’s allowance. Your provider can tell you if your ISA is flexible.
In our bullet-point examples below, you can see the difference in how this might work, depending on whether your ISA is flexible or not.
Your allowance is £20,000. Imagine you put £10,000 into an ISA during the 2024 to 2025 tax year. You then take out £5,000.
The amount you can now put in during the same tax year is
- £15,000 if your ISA is flexible (the remaining allowance of £10,000 plus the £5,000 you took out)
- £10,000 if your ISA is not flexible (just the remaining allowance)
If you think you might need to take money out and will want to put it back during the tax year, it’s a good idea to check what the rules are for each ISA you look at, before you open it.
How can I check how much ISA allowance I’ve got left for the year?
If you’ve opened an account for that year, your provider should be able to tell you, or you can see from your online statement.
Do transfers affect my ISA limits?
No, provided they’re carried out between your new provider and your old provider as an ISA transfer.
If you don’t fill out the transfer request form, and instead take the money out of an old account and pay it into a new account, the money you pay in will form part of your ISA allowance for that tax year.
What happens if I go over my ISA allowance?
It can be an easy mistake to make, especially if you have, say, a cash ISA and a stocks and shares ISA.
At the end of the tax year, HMRC will check records for individuals, so they’ll know if you've paid in too much money.
You may get a warning letter, if this is the first time it’s happened, or HMRC may view it as tax evasion and take action. Your providers are likely to be instructed to remove any over-subscriptions and you’ll be taxed on any income, growth or profits related to that money.
HMRC advises against trying to correct any mistakes of exceeding the allowance by drawing money out, as you could make things worse. That’s especially true if you take it out of the wrong account – as in, not the one that took you over the limit.
In such situations, it recommends that you call its Isa helpline instead, on 0300 200 3312. They’ll take the details of your ISAs and work out which payment in, took you over the allowable limit. They’ll then reclaim the money and claw back any tax you owe.
What happens to my ISA allowance if I move abroad?
You can’t put any money into your ISA after the tax year that you move overseas, or open any more ISAs during the period you’re living aboard. But there are a few exceptions. If you’re a Crown employee who is working outside the UK or you’re their spouse or civil partner, you’ll still be able to use your ISA allowance in the UK.
And while you might not be able to open a new ISA, you’ll be able to keep any existing ISAs and they’ll maintain their tax-free status, so you won’t have to pay tax on any interest or profit. If you’re not happy with your current provider or want to transfer your ISA account, say to get a better rate of interest, you’ll still be able to do that.
You should let your ISA provider know that you’ve moved abroad and are no longer a UK resident.
Can I transfer my ISA allowance to my spouse or civil partner?
No, it’s a personal allowance. But you could gift them the money to use for an ISA themselves to get the benefit of the tax-free allowance.
What happens to ISA allowances on the death of a spouse or civil partner?
The Government has recognised that many couples save with a joint income. To help bereaved people have a secure financial future, the Government allows the person who’s still living, to benefit from the tax advantages that were previously shared.
So, if your spouse or civil partner dies, you’re allowed to inherit their ISA allowance.
As well as your normal ISA allowance, you can add a tax-free amount up to either:
- The value they held in their ISA when they died
- The value of their ISA when it’s closed
Contact your ISA provider or the provider of your spouse or civil partner’s ISA, for details.
How have ISA limits changed since they were first introduced?
When ISAs were first introduced, the allowance level was much lower than it currently is. Also, there were more rules about how much of your maximum ISA allowance you were allowed to put into a cash ISA, and other limits.
This table shows what the allowances were and includes details of when new types of ISAs were introduced.
|
Annual ISA allowances (subscription limits) |
||||
|
Tax year starting 6 April |
Shares ISA /Overall Subscription Limit/ |
Cash ISA Limit |
Junior ISA (under 18s only) |
Lifetime ISA |
|
1999-2000 |
£7,000 |
£3,000 |
||
|
2000-01 |
£7,000 |
£3,000 |
||
|
2001-02 |
£7,000 |
£3,000 |
||
|
2002-03 |
£7,000 |
£3,000 |
||
|
2003-04 |
£7,000 |
£3,000 |
||
|
2004-05 |
£7,000 |
£3,000 |
||
|
2005-06 |
£7,000 |
£3,000 |
||
|
2006-07 |
£7,000 |
£3,000 |
||
|
2007-08 |
£7,000 |
£3,000 |
||
|
2008-09 |
£7,200 |
£3,600 |
||
|
2009-10 |
£7,200a/ £10,200b |
£3,600a/ £5,100b |
||
|
2010-11 |
£10,200 |
£5,100 |
||
|
2011-12 |
£10,680 |
£5,340 |
£3,600 e |
|
|
2012-13 |
£11,280 |
£5,640 |
£3,600 |
|
|
2013-14 |
£11,520 |
£5,760 |
£3,720 |
|
|
2014-15 |
£11,880c/ £15,000d |
£5,940c/ £15,000d |
£3,840f/ £4,000g |
|
|
2015-16 |
£15,240 |
£15,240 |
£4,080 |
|
|
2016-17 |
£15,240 |
£15,240 |
£4,080 |
£4,000 |
|
2017-18 |
£20,000 |
£20,000 |
£4,128 |
£4,000 |
|
2018-19 |
£20,000 |
£20,000 |
£4,260 |
£4,000 |
|
2019-20 |
£20,000 |
£20,000 |
£4,368 |
£4,000 |
|
2020-21 |
£20,000 |
£20,000 |
£9,000 |
£4,000 |
|
2021-2022 |
£20,000 |
£20,000 |
£9,000 |
£4,000 |
a. Applicable to those aged under 50.
b. Applicable to those aged 50 and over from 6 October 2009.
c. Limits until 30 June 2014
d. The cash and overall subscription limits were raised to £15,000 from 1 July 2014 with the introduction of the New ISA (NISA).
e. Applicable from 1 November 2011
f. Limits until 30th June 2014
g. These limits were raised to £4,000 from 1st July 2014.
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