Each tax year there's a limited amount of money you can put in an ISA. This limit is set by the government and is called the ISA allowance. In the 2024/2025 tax year, the allowance is £20,000.
You can split the ISA allowance across any combination of different ISAs but it’s your responsibility to ensure you stay within the £20,000 limit. You can mix and match between Stocks and Shares, Innovative Finance and Cash ISAs but Lifetime ISAs work differently – you can only open one Lifetime ISA each tax year - read more in our Lifetime ISA section.
It's a good idea to use as much of the ISA allowance as you can, because that way you'll be making the most of the ISA tax break for your money.
FAQs
What is the ISA allowance for 2024/25? You can pay up to £20,000 into ISAs in your name during the 2024/25 tax year. The current tax year started on 6 April 2024.
What is the ISA allowance for 2024 25? ›
The ISA allowance for 2024/25 is £20,000, unchanged from the last tax year. This means you can pay £20,000 into ISAs from 6 of April 2024 to the 5 of April 2025.
How to maximize ISA allowance? ›
Here's five quick steps to make the most of your ISA pot across the tax year.
- Work out what you're saving for. ...
- Ignore the noise. ...
- Give yourself a 25% boost. ...
- Shift those dividends into your ISA. ...
- Make your income earn you more income.
Frozen ISA allowances for the 2024/25 tax year
Despite some calls for an increase in annual allowances, the government has frozen these limits for this tax year (6 April 2024 - 5 April 2025). This means the overall ISA allowance is still £20,000 per tax year.
How does HMRC check ISA allowance? ›
Isa providers are obliged to provide contribution histories to HMRC. If you go over your limit without realising it, HMRC will contact you and you can arrange to correct the underpaid tax.
What are the new changes to the ISA in 2024? ›
1.1 Increase the age for opening cash ISAs from 16 to 18 years old and over. From 6 April 2024 it will not be possible for anyone aged 17 and under to subscribe to more than one cash ISA . This is a mandatory change with transitional arrangements.
What happens if I accidentally exceed my ISA allowance? ›
In situations where you have saved in excess of this sum in your ISAs in the tax year, you will need to discuss with your ISA providers, the removal of the excess from your ISA, incuding any interest the excess generated, and return it to you. The excess interest is taxable and should be declared. Thank you.
Is it worth using ISA allowance? ›
Why use your ISA allowance? The tax you would pay on capital gains on investments such as shares sits between 10% and 20%, depending on your tax position. This means holding funds in an ISA can make a lot of sense.
Where should I put 20k in savings in the UK? ›
You can pay up to £20,000 into a Cash ISA each tax year. Returns on an ISA are tax-free, so you get to keep more of the interest you receive. An alternative to a cash ISA is a high-interest savings account. These work in a similar way to Cash ISAs, but you any interest you receive is taxable.
How many people use full ISA allowance? ›
Just one in seven Brits use all of their yearly ISA allowance (£20,000). The research also revealed that those who don't have an ISA are twice as likely to dip into their savingscompared to those that do have an ISA, suggesting ISAs can be beneficial for helping Brits stick to their savings goals.
Each year we're given an ISA allowance and if we don't use it up by the ISA deadline or tax year-end i.e. 5th April 2025 at midnight it's gone.
Why am I losing money in my ISA? ›
If your investments have dropped in value, you might be asking yourself “why is my ISA losing money?”. It's important not to worry. Remember, it's completely normal for investments to go up and down in value and you haven't lost any money yet - unless you sell your investments for lower than you paid.
Can I split my ISA allowance? ›
You can split the ISA allowance across any combination of different ISAs but it's your responsibility to ensure you stay within the £20,000 limit.
What does Martin Lewis say about ISAs? ›
"For most people with fixed rate cash ISAs, I can't promise everyone, but certainly enough of you very close to the end of it should be ditching them, paying the penalty, and putting them [the money] in somewhere that pays more at the moment."
What happens if I pay more than $20,000 into an ISA? ›
As £20000 is the maximum you can put into any combination of ISA's in a tax year, you will need to contact the ISA provider, who you saved £2000 with, so that they can repay the sum to you and bring you back in line with the ISA rules.
Can I backdate my ISA allowance? ›
Understand the “Use it or Lose it” rule: Unlike some accounts, your annual ISA allowance resets to £20,000 each April 6th. Any unused portion from the previous year cannot be carried forward, so make sure to utilise it before the deadline!
Can I put $20,000 in a cash ISA every year? ›
Yes, you can add money to your Cash ISA every year, as long as the total amount does not exceed the ISA cap for 2024/25 of £20,000. There is no cash ISA limit. If you contribute to more than one type of ISA during the same tax year, this total amount of £20,000 must be split and shared across the ISA accounts.
Can I open two cash ISAs in 2024? ›
How many ISAs can you open in a tax year? Since the start of the 2024/25 tax year, there is no limit on the number of ISAs that you can open with different providers (apart from lifetime ISAs). This means you could have a Cash ISA with us, and another with a different bank or building society.
What is the cash ISA allowance per year? ›
What if I have more than 85000 in an ISA well? ›
MoneySavingExpert.com's senior money writer, Helen Saxon, says: "If you've been a really savvy saver and now have more than the £85,000 savings limit, then for full protection, you'll need to transfer the extra to a different cash NISA. "But beware – never just withdraw cash from one as it'll lose its tax-free status.
