What is an ISA allowance?

An ISA allowance is the maximum amount a person is able to save in ISAs per tax year. In the UK, the tax year runs from the 6th of April to the 5th of April the following year. You can choose to split your ISA allowance across different types of ISAs or invest it all into one ISA account. 

 

What is the maximum annual ISA allowance?

The maximum annual ISA allowance for 2024/25 is £20,000. However, if you're in a relationship and you're saving towards a joint investment such as a house, it's important to consider that you'll each have an allowance and so can save £20,000 per tax year into your own individual ISA accounts, meaning a possible £40,000 combined ISA allowance.

The ISA allowance has increased steadily since its launch in 1999, however it has remained unchanged at £20,000 since April 2017.

 

How does the ISA allowance work?

Every tax year you have an annual ISA allowance of £20,000 that you can invest.

If you do not use your full ISA allowance by the end of the tax year, you will be unable to carry it forward to add to the following year's allowance and you will lose it. It's also important to note that our Stocks and Shares ISA is not a flexible ISA. This means that if you choose to withdraw some of your savings before using all of your annual ISA allowance, you will still only be able to invest the remainder of your ISA allowance for the rest of the tax year.

As an example, if you invest £10,000 of your £20,000 ISA allowance but then withdraw £3,000, the additional amount you can invest during that tax year is still £10,000.

While investing in an ISA gives your money the potential to grow, it's important to be aware that investment always comes with risk and the value of your investment and any income from it may fall as well as rise and is not guaranteed. If you’re not sure, it may be best to speak to a financial adviser before making an investment decision.