Cash ISA allowance 2026/27: how much can you save tax-free?

The Cash ISA allowance this tax year

The ISA allowance for the 2026/27 tax year is £20,000, and you can put all of it into Cash ISAs if you want to. The tax year runs from 6 April 2026 to 5 April 2027.

GOV.UK’s ISA guide puts it plainly: “In the 2026 to 2027 tax year, the maximum you can save in ISAs is £20,000.” Interest earned inside a Cash ISA is free of income tax, and it does not count towards your Personal Savings Allowance. You must be 18 or over and UK resident (or a Crown servant or their spouse or civil partner) to open one, and an ISA can only be in one person’s name.

The allowance counts what you pay in during the tax year, not how much you hold. Interest added to your ISA does not use allowance, and money from earlier years stays tax-free for as long as it stays in an ISA. GOV.UK says your ISAs will not close when the tax year finishes.

How the allowance splits across ISA types

There are four types of adult ISA: cash ISAs, stocks and shares ISAs, innovative finance ISAs and Lifetime ISAs. The £20,000 is one combined limit across all of them. You can use it in one account or split it however you like, with one cap: no more than £4,000 a year into a Lifetime ISA.

GOV.UK gives several examples. One is £15,000 in a cash ISA, £2,000 in a stocks and shares ISA and £3,000 in an innovative finance ISA in one tax year. Another adds a Lifetime ISA: £11,000 in cash, £2,000 in stocks and shares, £3,000 in innovative finance and £4,000 in a Lifetime ISA. Both add up to the full £20,000.

This site covers savings, so the rest of this guide is about Cash ISAs. If you only ever use a Cash ISA, the whole £20,000 is available to it this tax year.

Can you have more than one ISA in a year?

Yes, you can pay into more than one Cash ISA in the same tax year. One of GOV.UK’s worked examples is £10,000 in one cash ISA, £3,000 in another cash ISA and £7,000 in a stocks and shares ISA in a single tax year.

What matters is the total. Across every ISA you pay into, new money must not go over £20,000 between 6 April and 5 April. The one type limited by number is the Lifetime ISA: you can only pay into one Lifetime ISA in a tax year.

Holding several ISAs can be useful. You might keep a flexible easy access Cash ISA for money you may need, and a fixed-rate ISA for money you will not touch. Each provider only sees its own account, so keeping track of the total is your job. A simple note of what you have paid in, and where, saves trouble at the end of the tax year.

Transfers do not use your allowance

Moving existing ISA savings from one provider to another is a transfer, and it does not count as a new payment. HMRC’s transfer guidance for ISA providers says that “investments and cash transferred are not new subscriptions for the purposes of the overall subscription limit.”

The crucial part is how you move the money. GOV.UK says you should contact the provider you want to move to and fill out its ISA transfer form. If you withdraw the money and pay it in yourself, “you will not be able to reinvest that part of your tax-free allowance again”. Transfers between cash ISAs should take no longer than 15 working days.

Many app ISAs accept transfers in, and some pay a different rate on transferred money. Our best Cash ISA apps comparison notes the transfer rules for each one we cover.

Withdrawals and flexible ISAs

You can take money out of a Cash ISA at any time without losing the tax benefits on what remains. But on a standard ISA, withdrawing does not give you any allowance back. If you pay in £10,000 and take out £3,000, you have still used £10,000 of allowance.

A flexible ISA is different. It lets you replace money withdrawn in the same tax year without it counting again. Chip’s Smart Cash ISA is a flexible ISA, and Chip’s page says: “You can withdraw money and redeposit it within the same tax year without affecting your annual £20,000 allowance, subject to ISA rules.” Our flexible ISA guide works through GOV.UK’s example and the same-tax-year rule.

Using the allowance well through the year

The allowance is a use-it-or-lose-it limit, so a little planning helps. A few practical points:

• Earlier is usually better. Money paid in on 6 April earns tax-free interest for the whole year. The same amount paid in during March earns it for a few weeks. If you have a lump sum ready, there is no benefit in waiting.
• Regular saving works too. If you save from your salary, a monthly payment into a Cash ISA uses the allowance gradually. Spread across twelve months, £1,667 a month would use the full £20,000.
• Keep your own running total. Each provider only knows about its own account. If you pay into two or three ISAs in a year, add them up yourself so you do not go over.
• Mind the deadline. Payments must reach the provider by 5 April. Bank transfers are usually quick, but leave a few days’ margin in case a payment is delayed.
• Interest does not count. Interest paid into your ISA is not a new payment, so it never uses up allowance.

If you do go over, HMRC’s guidance for ISA providers tells them to remove over-subscriptions they find, so the excess will not stay tax-free. Spotting it yourself first is far easier than unpicking it later.

The cash ISA change from April 2027

From 6 April 2027, the government plans to cut the cash ISA limit to £12,000 a year for people aged under 65. The overall ISA allowance stays at £20,000. Nothing changes for the current 2026/27 tax year.

The detail is in an HMRC policy paper published on 17 September 2026. It says the measure amends the ISA Regulations “to reduce the annual cash ISA subscription limit to £12,000 for individuals aged under 65 from 6 April 2027”, and that “for investors aged 65 or over the annual cash ISA limit will remain at £20,000.” The change was first announced at Budget 2025.

For under-65s, that means up to £12,000 of new money in Cash ISAs each year from 2027/28, with the remaining £8,000 of the overall allowance usable only in other ISA types. The paper also describes rules to stop the limit being sidestepped, including restrictions on transfers from stocks and shares ISAs and innovative finance ISAs into cash ISAs. HMRC’s figures suggest most savers will not notice: in 2022/23, 78% of cash ISA subscribers under 65 paid in less than £12,000.

Separately, HMRC’s guidance for ISA providers says that from 6 April 2027, any ISA receiving a subscription will need your National Insurance number, or a declaration that you are not eligible for one. If an app asks for it, that is why.

Do you need an ISA at all?

Many savers pay no tax on their interest even outside an ISA, thanks to the Personal Savings Allowance. According to GOV.UK’s page on tax-free savings interest, basic-rate taxpayers can earn £1,000 of interest a year tax-free, higher-rate taxpayers £500, and additional-rate taxpayers £0. Some people on low incomes also get the starting rate for savings.

To put that in context: at Chip’s Instant Access standard rate of 3.00% AER, you would need about £33,300 saved for a whole year to earn £1,000 of interest, or about £16,700 to earn £500. Rates are variable, so treat those as rough guides. The savings interest calculator runs the numbers for your own balance.

An ISA still makes sense for many people even below those levels. Rates can rise, balances grow, and a pay rise can move you into a higher tax band with a smaller allowance. Money sheltered in an ISA stays tax-free for good, whereas the allowance itself cannot be carried forward. And ISA rates are not always lower: Chip’s Smart Cash ISA pays 4.68% AER (variable tracker) for new customers for 12 months, then 3.50% AER, compared with Instant Access at 3.51% AER (variable tracker) for 12 months, then 3.00% AER. Our Chip Smart Cash ISA page covers how it works, and the Chip interest rates page lists every account.