UK ISA Basics: Types, Allowances & Tax Rules (2025/26)
ISAs (Individual Savings Accounts) offer tax-efficient ways to save and invest in the UK. This guide explains the four main ISA types, annual allowances, and how to optimize your savings strategy for the 2025/26 tax year.
Types of ISAs
- Cash ISA: Tax-free interest on savings (up to £20,000 annual allowance)
- Stocks & Shares ISA: Tax-free growth on investments (max £20,000 per year)
- LISA (Lifetime ISA): Government bonus on 25-40 year-olds' savings (up to £4,000/year)
- IFISA (Innovative Finance ISA): Tax-free peer-to-peer lending (counts toward overall ISA allowance)
Annual ISA Allowance (2025/26)
Your total ISA contributions cannot exceed £20,000 per tax year. You can split this across multiple ISA types, but only one provider per category (e.g., one Cash ISA, one Stocks & Shares ISA).
Key ISA Rules
| Feature | Cash ISA | Stocks & Shares ISA |
|---|---|---|
| Annual Limit | £20,000 | £20,000 |
| Tax Benefits | No income tax on interest | No capital gains tax on returns |
| Withdrawals | Flexible (reinvest withdrawn amounts) | Flexible options available |
How to Use Our ISA Calculator
Track your ISA usage in real-time using our free tool. Simply enter your existing contributions to see remaining allowance, potential LISA bonuses, and tax savings.