Insights 7min(s)

What is the 2025/26 Cash ISA Allowance?

Thinking of opening an Individual Savings Account (ISA)? With the opportunity to earn tax-free interest on your savings, it can be a smart choice. But before you open an account, it’s important to know the ISA rules.

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Cash ISA Allowance and how it works

The ISA Allowance is a government-set limit for how much you can pay into an ISA, allowing savers to earn tax-free interest. There are three key ISA Allowance rules you should be aware of.

1. You can save up to £20,000 into Individual Savings Accounts (ISAs) this tax year

This covers all types of ISAs, including Cash ISAs, Lifetime ISAs and Stocks and Shares ISAs. Any interest that you earn is tax-free as long as you do not exceed the maximum £20,000 across your ISAs. Junior ISAs are an exception, and the limit for these this tax year is £9,000.

The current tax year runs from 6 April 2025 to 5 April 2026 — so if you’ve already deposited into an ISA this year, this amount of money forms part of your annual ISA Allowance. If you don't use the £20,000 allowance by 5 April 2026, it will be forfeited. The ISA Allowance renews every year, allowing you to build up your tax-free savings.

For more information, visit our ISA Deadline page.

2. You can spread your £20,000 Annual ISA Allowance across multiple types of ISAs

This includes Cash ISA and a Stocks and Shares ISA. Although some types of ISA have smaller maximum allowances, they are cumulative to your total limit of £20,000 (excluding Junior ISAs).

For example, if you maxed out the Lifetime ISA, which has a £4,000 limit, you could only deposit a maximum of £16,000 in your Cash ISA. However, you could deposit up to £20,000 in a Cash ISA if that was your only ISA deposit for the year.

Having more than one ISA could give you more flexibility, but it could also lead to you saving more than £20,000 across your ISA accounts and not realising. This might mean you have to declare your savings in a tax return, even though they’re in an ISA.

3. You can open and fund as many Cash ISAs as you like at one time with different providers in the same tax year.

This means you aren’t limited in the number of ISAs per year. You just have to make sure that you don't exceed your yearly ISA limit of £20,000 for all your ISAs. Although you can now open and save in two or more Cash ISAs in the same tax year, you can only open and fund one Cash ISA with Shawbrook per tax year. 

Does transferring affect my ISA Allowance?

No. Transferring from one ISA to another ISA allows you to maintain the ISA tax-free status benefits. It is important to follow the ISA transfer process to ensure your tax-free allowance is protected.

If you withdraw money from an ISA into a non-ISA, before then placing it into another ISA, the money will lose its tax-free status.

In addition, if the money was deposited in the same tax-year, it may reduce how much money you can pay back into an ISA during that tax-year given the Annual ISA Allowance of £20,000.  

Flexible ISAs are the exception. A flexible ISA allows the withdrawal and replacement of money during the same tax year, without affecting your Annual ISA allowance. Shawbrook does not offer flexible ISAs. 

For more information, visit our pages below:

What happens if you overpay into an ISA?

Any funds contributed to your ISA exceeding the £20,000 annual ISA allowance will be subject to taxation. If you realise you have made this mistake, contact your ISA provider so they can repay the sum to you and bring you back in line with the ISA rules.

If you are a Shawbrook customer who has not split their allowance across multiple providers, all funds deposited that contributed to exceeding the £20,000 limit will be automatically returned.

For example, if you make a £20,500 deposit, we will return the entire £20,500 rather than just the excess £500.

Please note, funds from previous deposits will remain untouched. We only return individual payments that take a customer over the annual ISA allowance - not the full balance of the account.

However, if you have divided your allowances between different providers, HM Revenue & Customs (HMRC) will contact you after the tax year with instructions on the next steps.

What are the different types of ISA?

There are several types of ISA that contribute to your ISA Allowance, but not all providers will offer all of them. For example, at Shawbrook we only offer Easy Access Cash ISAs and Fixed Rate Cash ISAs.

The six main types of ISA available on the market are: 

Cash ISAs 
Stocks and Shares ISAs 
Innovative Finance ISAs 
Lifetime ISAs 
Help to Buy ISAs
Junior ISAs

Cash ISAs

Cash ISAs allow you to save money and receive interest on the amount. Interest rates can be fixed or variable, and accounts can either be easy access, fixed term, or notice ISAs. Please note, Shawbrook do not offer Notice ISAs.

Explore Shawbrook Cash ISAs

Easy Access ISA

With an Easy Access Cash ISA, you can deposit or withdraw money with next working day access, this may be suitable for savers who need access to their money. However, before withdrawing money from an Easy Access Cash ISA, it is essential to consider the potential impact on your tax-free ISA allowance.

Explore Shawbrook Easy Access Savings Accounts

Fixed Term ISA

With a Fixed Term Cash ISA, you agree to lock your funds away for a set time to earn a fixed interest rate for the period. You can make withdrawals before maturity, but this will be subject to an early exit charge.

Explore Shawbrook Fixed Rate Savings Accounts

Notice ISA

A notice ISA requires you to tell your provider in advance when you want to withdraw your money. Once you let your provider know you want to withdraw money, you’ll have to wait for your notice period to pass before you’re paid. You’ll agree to the length of your notice period when you first sign up for an account. This can vary, but you’ll typically earn a higher interest rate for a longer notice period.

Please note, Shawbrook does offer Notice Accounts but does not offer Notice ISA.

Stocks and Shares ISA

Stocks and shares ISAs may pay higher rewards but usually carry greater risks. As the name suggests, your money is deposited in stocks and shares. Your capital is at risk as these can go up or down.

Stocks and Shares ISAs are not offered at Shawbrook.

Innovative Finance ISA

Sometimes known as an IFISA, an Innovative Finance ISA involves peer-to-peer lending. With this kind of ISA, you deposit our money through an online portal and agree to lend your money to individuals or businesses. It works by borrowers paying your money back with interest. This can offer a higher interest rate than traditional ISAs but comes with more risks, such as a borrower failing to pay.

Innovative Finance ISAs are not offered at Shawbrook.

Lifetime ISA

Lifetime ISAs (also known as LISAs) can only be opened by adults aged 18-39, although you can continue to save in them until you’re 50. After then, you can keep the account open, but you can’t make any more payments into it.

These ISAs are for saving for two major life events — buying a property and retirement. Because of this, you can only withdraw money when purchasing a first home or reaching retirement (when you’re 60 or over).

This different type of ISA forms part of your overall allowance but has a smaller limit. You can deposit a maximum of £4,000 in each tax year. The government will add 25% bonus to your savings, so you can get a bonus of up to £1,000 a year.

Lifetime ISAs are not offered at Shawbrook.

Help to Buy ISA

Help to Buy ISAs closed to new savers in November 2019 but if you have an existing account, you can continue to save in it until November 2029.

Help to Buy ISAs are for saving for your first property purchase. With these, the government will pay £50 for every £200 saved up to £3,000 (which is £12,000 of savings). You will need to claim your 25% government bonus by November 2030.

You can deposit a maximum of £200 per month, which is £2,400 over the whole year.

Help to Buy ISAs are not offered at Shawbrook.

Junior ISA

Unlike the above, junior ISAs (also known as JISAs) are separate from your ISA Allowance. This is because junior ISAs belong to the child, not the adult saving into the account.

They are available as Cash ISAs or Stocks and Shares ISAs.

In the current tax year, the limit for junior ISAs is £9,000. The child cannot withdraw money until they turn 18 when the account automatically becomes an adult ISA.

Junior ISAs are not offered at Shawbrook.

Start saving with a Shawbrook Cash ISA

Shawbrook offers Easy Access and Fixed Rate Cash ISAs with a minimum balance of £1,000 and a maximum account balance of £250,000.

Fixed Rate Cash ISAs provide a guaranteed interest rate for a fixed term, with withdrawals before maturity subject to an early exit charge.

Easy Access Cash ISAs provide a variable interest rate, adjusting with interest rate conditions, and allow next working day access to funds subject to a minimum withdrawal of £500.

To fund a Shawbrook Cash ISA, you can either transfer funds from another ISA or make a deposit from a linked account. When adding money to your Cash ISA be sure to not exceed the £20,000 Annual ISA Allowance.

To learn more about Shawbrook Cash ISAs, visit our Cash ISAs page.

View our Cash ISAs

Find out more about our cash ISAs and the rates available.

View Our Cash ISA Accounts