Innovative Finance ISA
£20,000 annual allowance · typical return 6.5%
Annual allowance
£20,000
2026/27 tax year
Government bonus
None
-
Age eligibility
18+
UK residents
Typical return
6.5%
high risk
100% of the cross-wrapper £20,000 cap
Innovative Finance ISA vs other ISA wrappers
Annual subscription allowance comparison
Key insight
A Innovative Finance ISA gives UK residents aged 18+ an annual £20,000 tax-free subscription limit. There is no government bonus here, growth comes solely from the account's own interest or investment returns. Expect high-risk exposure here; typical returns run close to 6.5% (P2P 2018-2024 median).
Best fit: Sophisticated investors, small allocation. Not ideal for: Capital preservation.
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 | Innovative Finance ISA | Source |
|---|---|---|
| Annual allowance | £20,000 | gov.uk ISAs |
| Government bonus | None | HMRC ISA Manual |
| Age eligibility | 18+ | HMRC ISA Manager Guidance |
| Risk band | high | FCA Conduct of Business |
| Typical return | 6.5% | P2P 2018-2024 median |
| FSCS protection | Not FSCS protected, capital at risk | FSCS |
| Withdrawal rules | Subject to underlying loan term. | HMRC ISA Manual |
| Transfer rules | Permitted between IFISA providers. | 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 Innovative Finance ISA providers?
Yes. Complete the new provider's transfer request; transfers are exempt from the £20,000 yearly subscription cap. Permitted between IFISA providers.
Can I subscribe to multiple Innovative Finance ISAs in one tax year?
Since 6 April 2024, HMRC allows multiple subscriptions to same-type ISAs within one tax year (the £20,000 overall cap still applies).
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.