An Individual Savings Account (ISA) is a wrapper: the money inside it can be cash or investments, and whatever it earns is free of Income Tax and Capital Gains Tax. You don’t need to declare ISA interest, income or gains on a tax return. This page sets out the types, the allowance and the main choices, and links to the guide for each.
The types of ISA
| ISA | What it holds | Worth knowing |
|---|---|---|
| Cash ISA | Savings with a bank, building society or NS&I | Easy access, notice or fixed rate, like a savings account: see cash ISA rates |
| Stocks and shares ISA | Shares, funds, bonds and other investments | Can fall as well as rise: see cash or stocks and shares |
| Innovative finance ISA | Peer-to-peer loans and crowdfunding debentures | Higher risk, with very limited FSCS cover: see innovative finance ISAs |
| Lifetime ISA | Cash or investments, for a first home or later life | 25% government bonus, but a charge on other withdrawals: see the Lifetime ISA guide |
| Junior ISA | Cash or investments for a child under 18 | Locked until 18: see Junior ISAs |
The allowance
Each tax year (6 April to 5 April) you can pay up to £20,000 into ISAs, in one account or split across several, including more than one of the same type; up to £4,000 of it can go into a Lifetime ISA. Unused allowance doesn't carry over to the next year. The rules in full, with examples of splitting it, are in the ISA allowance guide.
From 6 April 2027: From 6 April 2027 the most people under 65 can put into cash ISAs is £12,000 a tax year, within the overall £20,000 ISA allowance; people aged 65 or over keep a £20,000 cash ISA limit.
ISA or savings account?
Interest outside an ISA is tax-free only up to your Personal Savings Allowance. If your interest stays within it, a savings account paying more than a cash ISA is the better deal; if it doesn’t, or might in future, a cash ISA keeps the interest tax-free for as long as the money stays in. The Bank of England’s average rates for both are compared in cash ISA rates.
ISA or pension?
A pension gets tax relief on what you pay in and often an employer contribution, but you usually can’t touch it until you’re 55 (57 from 6 April 2028). An ISA gets no tax relief going in, but you can take the money out whenever you want, tax-free. See pension or ISA.
Moving and protecting your ISA
To move an ISA to another provider, always use an ISA transfer: withdrawing the money and paying it in elsewhere uses up allowance again. See ISA transfers.
A cash ISA is a deposit, so the FSCS protects it up to £120,000 per person, per bank, counted together with your other savings at the same bank (FSCS protection). Investments in a stocks and shares ISA can fall in value, and the FSCS doesn’t compensate for that.
ISA guides
| Guide | What it covers |
|---|---|
| ISA allowance | This year’s allowance, splitting it, the 5 April deadline, and the cash ISA limit from April 2027 |
| Paying in too much | What happens if you go over the allowance, and how it’s fixed |
| Cash ISA rates | Average rates now, how to compare, and cash ISA or savings account |
| Cash or stocks and shares ISA | Risk, time and costs, and using both |
| Flexible ISAs | Taking money out and putting it back in the same tax year |
| ISA transfers | Moving an ISA without losing its tax-free status |
| ISA calculator | What an ISA grows to, and how long to reach a target |
| Innovative finance ISAs | Peer-to-peer lending in an ISA, and the risks |
| Inheriting an ISA | What happens on death, and the extra allowance for a spouse |
| Lifetime ISA guide | Who can open one, the bonus, first homes, retirement, and LISA or pension |
| Choosing a Lifetime ISA | Cash or stocks and shares, and what to compare |
| Lifetime ISA calculator | The bonus and your balance by the age you buy or retire |
| Withdrawing from a Lifetime ISA | The withdrawal charge, and when there isn’t one |
| Lifetime ISA or Help to Buy ISA | Help to Buy ISAs are closed to new savers: for existing holders, comparing, transferring and deadlines |
| Junior ISAs | Saving for a child, and what happens at 18 |
| Child Trust Funds | Finding one, and what happens at 18 |
| Pension or ISA | Tax relief against flexibility, and which to fill first |
| Cash ISA or Premium Bonds | Guaranteed interest against tax-free prizes |
For investing inside an ISA, see stocks and shares ISAs. For savings accounts, Premium Bonds and saving by age, return to Savings.