The £20,000 Annual ISA Allowance
Last updated: · PlainISA
What the allowance is
Every UK resident aged 16 or over (Cash ISA) or 18 or over (other ISA types) can subscribe up to £20,000 in total across all their ISAs in a single tax year. The tax year runs from 6 April to 5 April. The allowance does not roll over, unused capacity is permanently lost at midnight on 5 April. Subscriptions are tracked by HMRC across providers, and breaches result in HMRC voiding the over-subscription and recovering tax-free relief on associated income or gains.
The £20,000 figure has been the headline allowance since 6 April 2017. Before that, the cap rose in stages from £15,000 (2014/15) to £15,240 (2015/16 + 2016/17). Future increases require primary legislation in the Finance Act and have not been signalled by HM Treasury for the 2025/26 budget.
The LISA sub-limit
Within the overall £20,000 allowance, Lifetime ISA subscriptions are sub-capped at £4,000 per tax year. A saver who subscribes the full £4,000 to a LISA has £16,000 of remaining allowance available across the other three ISA types. The £4,000 LISA cap counts toward the £20,000 overall, not in addition to it.
Example: subscribe £4,000 to LISA + £10,000 to Cash ISA + £6,000 to S&S ISA = £20,000 total, fully tax-free, and the LISA receives a £1,000 HMRC bonus on top.
2024 rule change: multiple ISAs of the same type
From 6 April 2024 onwards, UK savers can subscribe to multiple ISAs of the same type within a single tax year. This is a significant relaxation of the previous rule, which permitted only one ISA of each type per year (i.e. one Cash ISA, one S&S ISA, one LISA, one IFISA, and no second Cash ISA in the same year, even at a different bank).
Practical implications of the new rule:
- A saver can chase the best Cash ISA rate at one bank for part of the allowance, and a different rate at another bank for the rest, all within the same tax year.
- S&S ISA savers can spread capital across multiple platforms for cost or feature reasons (e.g. one platform for funds, another for individual shares).
- Transfers between providers remain unaffected, they have always been outside the same-year, same-type rule.
The £20,000 overall and £4,000 LISA limits are unchanged. The LISA itself remains restricted to one LISA per tax year (the multiple-same-type rule explicitly excludes LISA in the legislation).
Pro-rated allowance? No.
A common misconception: the ISA allowance is sometimes thought to be pro-rated based on when in the tax year the saver opens an account. It is not. A saver opening a brand-new Cash ISA on 1 April (five days before tax-year-end) still has access to the full unused portion of their £20,000 allowance, subject only to the provider's own minimum-deposit rules.
Penalty for over-subscription
If a saver inadvertently subscribes over £20,000 across all ISAs in a single tax year, HMRC's standard response is to void the over-subscription at the latest provider (the one where the breach occurred chronologically) and notify the saver. The over-subscription amount is returned outside the wrapper, and any income or gains attributable to it become taxable.
Repeat or large-value breaches may trigger compliance action. Savers are responsible for tracking subscriptions across providers; HMRC does not warn in advance of an impending breach.
Junior ISA (separate allowance)
Children under 18 have a separate Junior ISA allowance of £9,000 per tax year (2026/27). Junior ISAs are held in trust until the child turns 18, at which point control transfers. Junior ISA subscriptions do not count against the adult saver's £20,000 allowance.
Frequently asked questions
- If I withdraw and re-deposit, does that count as a new subscription?
- It depends. If the ISA offers the "flexible" feature, withdrawals can be replaced within the same tax year without using more allowance. If the ISA is non-flexible, the re-deposit counts as a fresh subscription.
- Can I carry forward unused allowance?
- No. Unlike the pension annual allowance, ISA allowance does not roll over. 5 April is a hard cutoff.
- Does an ISA transfer count against my £20,000?
- No. Transfers between providers (using the receiving provider's transfer form) do not count as new subscriptions, regardless of the size of the transfer. Funds remain inside the ISA ecosystem and tax-free status is preserved.
Sources
Quick reference table
| ISA type | Allowance | Age |
|---|---|---|
| Cash | £20,000 | 16+ |
| Stocks & Shares | £20,000 | 18+ |
| Lifetime | £4,000 | 18-39 |
| Junior | £9,000 | 0-17 |
Key takeaways
Editorial perspective
The right ISA wrapper depends on time horizon, age, and goal, not on which one has the highest headline return. Provider-neutral framework guidance lets savers make informed decisions without product-steering. - PlainISARelated guides
- ISA Types Explained: Cash, S&S, LISA, IFISA - compare all four wrapper types side-by-side.
- The £20,000 Annual Allowance and Rules - how the cap works and the 2024 multiple-ISA rule.
- Transferring an ISA - preserve tax-free status when moving providers.
- Flexible ISA Explained - withdraw and replace within the tax year.
- Lifetime ISA Bonus Mechanics - the 25% HMRC top-up + early-withdrawal arithmetic.
- Tax-Year-End Checklist - pre-5-April actions to maximise the allowance.
- Which ISA for My Goal? - wrapper choice by saver goal.
Editorial note
PlainISA covers UK Individual Savings Account rules with a focus on plain-language explanation, source-cited mechanics, and goal-oriented decision framing.
We are not a financial adviser. The content here is informational only, for personalised advice, consult an FCA-authorised adviser.
Last reviewed by PlainISA against the HMRC ISA Manual and the gov.uk Individual Savings Accounts page on the date stamped at the top of this guide.
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