The £20,000 Annual ISA Allowance

Last updated: 2026-08-15 · PlainISA · 2026/27

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.

Quick reference table

Key takeaways

Editorial perspective

PlainISA covers UK Individual Savings Account rules with a focus on plain-language explanation, source-cited mechanics, and goal-oriented decision framing. Last reviewed against the HMRC ISA Manual and the gov.uk Individual Savings Accounts page on the date stamped at the top of this guide.