ISA Calculator (2025/26)
How it works
An ISA is a tax-free savings/investment wrapper. You can pay in up to £20,000 each tax year (split across Cash, Stocks & Shares, Innovative Finance, and Lifetime ISA). All interest, dividends and capital gains are tax-free, with no need to declare them.
Worked example
£300/month into a Stocks & Shares ISA at 5% for 25 years:
- Contributed: £90,000
- Final pot: ~£175,000
- Growth: ~£85,000 — entirely tax-free
Who should use this
- •Anyone with savings or investments outside an ISA
- •First-time buyers (LISA gives 25% bonus)
- •Higher-rate taxpayers minimising dividend/CGT exposure
- •Long-term savers planning for retirement alongside a pension
Common mistakes
- ×Holding cash in a Stocks & Shares ISA long term (low returns)
- ×Forgetting the £20k allowance is per tax year, not per ISA
- ×Withdrawing from a non-flexible ISA and losing the allowance
- ×Using a LISA without realising the 25% withdrawal penalty
Frequently asked questions
What is the ISA allowance for 2025/26?▾
£20,000 across all adult ISAs combined. £9,000 for Junior ISA. LISA contributions count toward the £20k.
Can I have multiple ISAs?▾
Yes — since April 2024 you can pay into multiple ISAs of the same type in one year, as long as total stays within £20k.
What's a Flexible ISA?▾
Withdrawals can be replaced in the same tax year without using more allowance. Not all providers offer this.
Cash ISA vs savings account?▾
Cash ISA is tax-free; standard savings get £1,000 (basic) or £500 (higher rate) Personal Savings Allowance, then taxed at marginal rate. ISAs win for higher-rate taxpayers or large balances.
What is a LISA?▾
Lifetime ISA — open between ages 18–39, contribute up to £4,000/yr, get 25% government bonus. Withdraw for first home (≤£450k) or after 60. Otherwise 25% penalty.
Does inheriting an ISA preserve tax-free status?▾
Spouses get an Additional Permitted Subscription equal to the deceased's ISA value, on top of their own £20k allowance.