Individual Savings Accounts remain one of the most valuable tools available to UK savers and investors.
The 2026-27 Allowance
The total ISA allowance is 20,000 pounds per person per tax year. You can split this across different ISA types.
Types of ISA
Cash ISA: Interest earned is tax-free. Best rates currently 4-5% AER from challenger banks. Most valuable for higher-rate taxpayers who have used their Personal Savings Allowance.
Stocks and Shares ISA: Gains, dividends and income within the ISA are free of tax. Designed for long-term investing of five years minimum.
Lifetime ISA: Available to 18-39 year olds. Government adds a 25% bonus on up to 4,000 pounds per year. Use for first home purchase or from age 60.
Junior ISA: Up to 9,000 pounds per year for under-18s.
Why ISAs Matter More Than Ever
With the dividend allowance cut to 500 pounds and capital gains tax annual exempt amount reduced to 3,000 pounds, sheltering investments in an ISA has never been more important for investors with meaningful portfolios.
