Cash ISA
£20,000 annual allowance · typical return 4.5%
Annual allowance
£20,000
2026/27 tax year
Government bonus
None
-
Age eligibility
16+
UK residents
Typical return
4.5%
low risk
100% of the cross-wrapper £20,000 cap
Cash ISA vs other ISA wrappers
Annual subscription allowance comparison
Key insight
Cash ISA lets UK residents aged 16+ shelter up to £20,000 a year from tax. This wrapper carries no government bonus, savers keep only what the account itself earns. Expect low-risk exposure here; typical returns run close to 4.5% (BoE Base Rate + median fixed-rate spread).
Where this wrapper shines: Emergency fund, short-term savings, capital preservation. Where it falls short: Long-term wealth building.
Derived from gov.uk Individual Savings Accounts + the HMRC ISA Manager Guidance Notes (2026/27 tax year). Additional context from HMRC ISA Statistics.
Rules at a glance
| Attribute | Cash ISA | Source |
|---|---|---|
| Annual allowance | £20,000 | gov.uk ISAs |
| Government bonus | None | HMRC ISA Manual |
| Age eligibility | 16+ | HMRC ISA Manager Guidance |
| Risk band | low | FCA Conduct of Business |
| Typical return | 4.5% | BoE Base Rate + median fixed-rate spread |
| FSCS protection | Protected up to £85,000 per banking authorisation | FSCS |
| Withdrawal rules | Variable: instant access typical. Fixed-rate accounts may forfeit interest on early withdrawal. | HMRC ISA Manual |
| Transfer rules | Transfer to any ISA type via receiving provider transfer form. | HMRC ISA Manual |
| Tax treatment | Interest, dividends, capital gains exempt from UK Income Tax and CGT | Income Tax Act 2007 s.694 |
Table sources: gov.uk Individual Savings Accounts, HMRC ISA Managers Guidance Notes, Income Tax Act 2007 s.694.
Frequently asked questions
Can I transfer between Cash ISA providers?
Yes. Complete the new provider's transfer request; transfers are exempt from the £20,000 yearly subscription cap. Transfer to any ISA type via receiving provider transfer form.
Can I subscribe to multiple Cash ISAs in one tax year?
Yes, as of the 6 April 2024 rule change you can pay into more than one Cash ISA in the same tax year, provided your total stays inside the £20,000 combined allowance.
Disclaimer & how ISA wrappers are taxed
Every ISA wrapper -- not just this one -- shelters interest, dividends, and capital gains from UK Income Tax and Capital Gains Tax, with no Self Assessment reporting required. Compared to saving outside any ISA wrapper, that matters most for higher-rate and additional-rate taxpayers; basic-rate taxpayers benefit primarily once their non-ISA interest exceeds the £1,000 Personal Savings Allowance.
PlainISA does not provide financial advice. For personalised guidance on which ISA wrapper suits your circumstances, consult an FCA-authorised financial adviser. See our methodology page for sourcing.
Browse all ISA types side-by-side or see our goal-mapped wrapper choice guide.