In this brief blog, we are going to discuss the  ISA allowance and answer some of the most common questions about the ISA allowance.

What is an ISA allowance?

An ISA allowance is a yearly allowance which the government allows you to save within an individual savings account(ISA) and receive tax-free returns. Every year the government reviews the ISA allowance and decides on whether to leave the ISA allowance the same or increase the ISA allowance for the next year. 

The ISA allowance is essentially the maximum you can contribute to an ISA every year. This doesn’t have to be in one ISA product. You can split your ISA amongst several types of ISA products in the same tax year but you cannot contribute to more than one type of ISA product in the same tax year.

You can invest your ISA allowance in a cash ISA, a help to buy ISA, a lifetime ISA, a stocks and shares ISA and an innovative ISA.

The current ISA allowance for the current tax year of 2018/2019 is £20,000.

Junior ISAs have a much reduced ISA allowance at £4,368.

The ISA allowance resets at the end of every tax year. This means if you don’t use your ISA allowance in one tax year, you won’t be able to roll it over to the next tax year but the new ISA allowance will reset for the next tax year. Since 2016 you can now take money out of your ISA account and replace it without it affecting your ISA allowance. In the past, you would not have been able to replace funds you took out of your ISA which meant that any new contributions will have reduced your ISA allowance for the tax year further.

Some ISAs such as the lifetime ISA and the help to buy ISA have their own ISA allowance limit.

Junior ISA allowance

As mentioned above the Junior ISAs have a reduced ISA allowance at £4,368.

Once a child turns 16 they can then have an adult cash ISA alongside their junior ISA but the junior ISA limit will remain the same. This means they will be able to save the maximum ISA allowance on their junior ISA as well as their adult cash ISA till they turn 18 and can no longer contribute to a junior ISA.

Below we have provided the historic ISA allowance for the previous tax years.

Tax year ISA allowance Junior ISA allowance

2014/2015 £15,000 £4,000

2015/2016 £15,240 £4,080

2016/2017 £15,240 £4,080

2017/2018 £20,000 £4,128

2018/2019 £20,000 £4,260

2019/2020 £20,000 £4,368

Below we have answered some of the most frequently asked questions about the ISA allowance.

What is the 2019/20 ISA allowance?

The 2019-20 ISA allowance is £20,000. This amount may increase for the next tax year and any the current ISA allowance cannot be used in the next tax year. It cannot be rolled over.

Can I put 20000 in an ISA every year?

No, you cannot put £20,000 into your ISA every year. You can only put the maximum ISA allowance into your ISA accounts each year. The current ISA allowance for the 2019/2020 tax year is £20,000 but there is no guarantee what it will be in the future years. You Should wait to see what HMRC says about this.

Can I have more than one ISA?

Yes, you can have more than one ISA. You Can have a lifetime ISA, a help to buy ISA, a stocks and shares ISA and contribute in any or all of these ISA accounts in the same tax year. You can only contribute to one type of ISA account each tax year. This means you cannot pay into more than one cash ISA in a given tax year.

How does ISA allowance work?

The ISA allowance works by giving you a set amount which you can contribute to an ISA or a variety of ISA accounts each year. You can use your ISA allowance for one ISA or multiple ISA accounts but you can only contribute to one type of ISA per tax year. It is possible to transfer to another Cash ISA or a Stocks and Shares ISA or Stocks and Shares ISA with another provider.

Does ISA interest count towards the Isa allowance?

No, your ISA interest does not count towards your ISA allowance. Your ISA interest is tax-free and will not affect how much you can contribute to your ISA in each tax year. Your ISA interest also does not count towards your personal savings allowance.

What does ISA allowance mean?

ISA allowance means the amount you can contribute to your ISA accounts in any tax year. The ISA allowance may change for each tax year. For the current 2019/2020 tax year the ISA allowance is £20,000

Can I have more than 1 cash ISA in a year?

Yes, you can have more than 1 cash ISA in a year but you can only contribute to one of those cash ISAs in each tax year. You cannot open more than one cash ISA in each tax year. You can transfer your ISA funds from a previous cash ISA to your new cash SA without affecting your ISA allowance.

Can you pay into two ISAs in the same year?

Yes, you can pay into two ISAs in the same tax year but the two ISAs cannot be of the same type. You can pay into a cash ISA and a Lifetime ISA in the same tax year but you cannot pay into two different cash ISAs or two different Lifetime ISAs in the same tax year.

Can I use previous year’s ISA allowance?

No, you cannot use a previous years ISA allowance as the ISA allowance doesn’t roll over from one year to the other. Each tax year an ISA allowance is announced and thats the maximum you can contribute into your ISA accounts for that tax year.

Can I pay into a cash ISA and a stocks ISA in the same year?

Yes, you can pay into a cash ISA and a stocks ISA in the same year as you can contribute to different types of ISAs in the same tax year. You cannot pay into more than one type of ISA in the same tax year. This means you cannot pay into two cash ISAs in the same tax year. You can transfer your old ISA accounts into new ISA accounts without it affecting your current ISA allowance.

Can I pay into someone else’s ISA?

Yes, you can pay into someone else’s ISA as long as they have given you their permission to do this. Paying into someone else’s ISA will reduce their ISA allowance for the year.

Can you carry forward ISA allowance?

You cannot carry forward an ISA allowance. The ISA allowance will be given each year and this is the maximum you can contribute for the tax year. You Should use your full ISA allowance if you are concerned about missing out on potential earnings.

What happens to my Isa when I die?

When you die your ISA will become a continuing ISA for 3 years within which your spouse can inherit it and avoid paying any inheritance tax.  This happens through an Additional Permitted Subscription (APS) which allows your spouse to have an increased ISA allowance of exactly however much is in your ISA when you die or on the closure of the ISA account. If you don’t have a spouse then it will get passed into your estate and inheritance tax may be due.

How many ISAs are you allowed?

You can open as many ISAs as you want but you can only open and contribute to one type of ISA each year. This means you can only open one cash ISA and contribute to one cash ISA each year.

What happens if I exceed my Isa allowance?

It is possible to exceed your ISA allowance and if you find that you have exceeded your ISA allowance as you had too many ISAs with different providers then HMRC will likely see this and know that you have exceeded your ISA allowance.

In most cases, HMRC will issue you a warning letter for exceeding your ISA allowance if its is the first time this has happened. If it isn’t the first time this has happened then HMRC may ask your ISA Provider to remove over-subscriptions and tax any income or growth related to that money.  HMRC advises against trying to correct the mistake by drawing money out – you can call the HMRC ISA helpline instead on 0300 200 3312.

In this brief guide, we have answered some of the most frequently asked questions about the ISA allowance.

If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.

You can also contact the debt charity “Step Change” if you are in debt and need help.


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John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.