ISA Calculator UK 2026-27
Calculate how your ISA savings could grow with tax-free compound returns. Model your Cash ISA at a fixed rate or your Stocks & Shares ISA with market-based growth assumptions. Uses the 2026-27 annual ISA allowance of £20,000. Results update instantly — adjust contributions, time horizon, and return rate to model different scenarios.
Rates and allowances correct for 2026-27 · Reviewed by the Richard Ross · Last updated April 2026
How the ISA calculator works
ISA annual allowance
The annual ISA allowance is £20,000 per person for 2026-27 (6 April 2026 to 5 April 2027). You can split this across multiple ISA types — Cash ISA, Stocks & Shares ISA, Innovative Finance ISA — in a single tax year, as long as the combined total does not exceed £20,000. The Lifetime ISA (LISA) sub-limit is £4,000 within this £20,000 total. If you accidentally exceed the allowance, HMRC will contact you and the excess must be withdrawn. Importantly, ISA allowances do not carry forward: unused allowance is lost permanently on 5 April each year. Couples can effectively combine allowances — two adults in the same household can shelter up to £40,000 per tax year across their respective ISAs.
⚠️ ISA allowance is changing in 2027-28
The annual ISA allowance remains £20,000 for the 2026-27 tax year (until 5 April 2027). From April 2027, the allowance will reduce to £12,000 for under-65s. Over-65s retain the full £20,000 cash limit. If you are under 65, consider maximising your 2026-27 allowance before 5 April 2027.
Full guide: ISA allowance changes 2027 →Cash ISA vs Stocks & Shares ISA
The fundamental tradeoff is certainty versus long-term return. Cash ISAs pay a fixed or variable rate on your deposit — your capital is protected and your return is guaranteed, but inflation can erode the real value of savings over time. Stocks & Shares ISAs invest in equities, bonds, or funds; returns are not guaranteed but have historically outperformed cash over periods of five years or more. The Vanguard FTSE All World index has returned approximately 8–9% annually (nominal) over the past 20 years; 7% is a commonly used conservative planning estimate. For time horizons under three to five years, most financial planners favour Cash ISAs for the certainty and capital protection. For long-term wealth building (10+ years), a Stocks & Shares ISA typically generates meaningfully higher returns — but you must accept the possibility of negative years. Best-buy Cash ISA rates change frequently: check current best-buy tables before opening a new account.
Tax benefit of ISA
Without an ISA, interest income above the Personal Savings Allowance (£500 for higher-rate taxpayers, £1,000 for basic-rate taxpayers) is taxed at your marginal income tax rate. Example: a higher-rate taxpayer with £50,000 in a Cash ISA earning 4% generates £2,000 interest per year. Outside an ISA, £1,500 of that (above the £500 PSA) would be taxed at 40% — a £600 annual tax bill. Inside an ISA: £0. The tax benefit compounds as your balance grows: a larger balance generates more interest and therefore a larger annual tax saving. For Stocks & Shares ISA holders the benefit also covers dividend income (completely tax-free inside an ISA, versus 8.75%/33.75% outside) and capital gains (no CGT on ISA growth, versus up to 18%/24% outside).
Capital gains tax on investments outside an ISA →ISA types and UK-specific rules
The UK has four main ISA types. Cash ISA: deposit-based, capital protected, FSCS-covered. Stocks & Shares ISA: investment-based, not capital protected. Lifetime ISA (LISA): pays a 25% government bonus on contributions up to £4,000/year, but withdrawing for any purpose other than a first home purchase or retirement (from age 60) incurs a 25% penalty on the full withdrawal — meaning you can get back less than you put in. Innovative Finance ISA (IFISA): holds peer-to-peer loans; higher potential returns but no FSCS protection and can be illiquid. Junior ISA (JISA): £9,000 limit for 2026-27, contributions locked until the child turns 18, cannot be accessed by parents. Inherited ISA: on the death of a spouse or civil partner, you receive an Additional Permitted Subscription (APS) equal to their ISA value, allowing you to shelter that amount in your own ISA without using your annual allowance.
ISA vs pension: which is better?
Both shelter savings from tax but they work in opposite directions. Pensions give upfront tax relief: a basic-rate taxpayer contributing £800 net receives a £1,000 pension credit (25% uplift); a higher-rate taxpayer can claim back a further £200 via self assessment, producing an effective 67% uplift on out-of-pocket cost. Pension withdrawals are taxed as income in retirement. ISAs give no upfront tax relief but withdrawals are completely tax-free at any age. ISAs have a critical flexibility advantage: no minimum access age, no lifetime allowance concern, and ISA withdrawals in retirement do not count as income — so they do not affect your personal allowance or trigger higher-rate tax bands on other income. The standard recommendation: pension first to get employer match and full tax relief, then ISA for flexible tax-free savings alongside.
Calculation methodology
The Cash ISA projection calculates compound growth monthly: existing balance grows at the annual rate compounded over the full term, and contributions are treated as monthly payments using the standard annuity formula A = P × [(1 + r/12)^(12t) − 1] / (r/12). The Stocks & Shares ISA projection uses the same formula with your chosen return rate as an estimate — not a guarantee. This calculator assumes returns compound and contributions are made consistently throughout the term. It does not account for platform charges, fund fees, or variable returns year-to-year. All figures are nominal (not inflation-adjusted). Source: ISA rules and allowances — GOV.UK (gov.uk/individual-savings-accounts).
Worked example: 10-year ISA projection
Further reading
From 6 April 2027 the Cash ISA limit drops to £12,000 for under-65s, while the overall £20,000 allowance is frozen until 2031. The 2026/27 tax year is your last chance to use the full £20,000 in cash.
What to do before April 2027 →Further reading
The Lifetime ISA sub-limit sits within your £20,000 annual allowance — but the 25% withdrawal penalty takes more than the bonus if you exit early.
The LISA withdrawal penalty explained →Frequently asked questions
What is the ISA allowance for 2026-27?
£20,000 per person for the 2026-27 tax year (6 April 2026 to 5 April 2027). You can split this across Cash ISA, Stocks & Shares ISA, and Innovative Finance ISA in the same year. The Lifetime ISA sub-limit is £4,000 within this total. Note: the allowance is confirmed to reduce to £12,000 for under-65s from April 2027.
What rate should I assume for a Stocks & Shares ISA?
Historical global equity returns have averaged 8–10% annually (nominal). After accounting for inflation (around 2%), a real return of 5–7% is commonly used in long-term planning. Past performance does not guarantee future returns. 7% is a conservative benchmark many planners use for illustrative projections.
Can I have both a Cash ISA and a Stocks & Shares ISA?
Yes. You can hold multiple ISA types simultaneously and contribute to one of each type per tax year, as long as total contributions across all ISAs do not exceed £20,000 in the tax year.
What happens to my ISA if I withdraw money?
For most ISAs, withdrawals are permitted at any time but the withdrawn allowance is permanently lost for that tax year. Flexible ISAs are an exception: they allow you to replace withdrawals in the same tax year without using additional allowance. Check your provider's terms before withdrawing.
Are ISAs protected by the FSCS?
Cash ISAs held with a UK-authorised bank or building society are protected by the Financial Services Compensation Scheme up to £85,000 per person per institution. Stocks & Shares ISAs held with an FCA-authorised investment firm are covered up to £85,000. Innovative Finance ISAs (peer-to-peer) are not FSCS-protected. Check your provider is FCA-authorised via the FCA register.
Can I transfer my ISA to a better-paying provider?
Yes. You can transfer ISAs between providers at any time without losing your tax-free status or your allowance history. Transfers must go via the receiving provider's official transfer process — withdrawing and redepositing counts as a new contribution and uses your current year's allowance. Most transfers complete within 15 working days.
Can I open an ISA if I'm not a UK resident?
No. You must be a UK resident to open a new ISA. If you move abroad after opening one, you can keep the ISA and it retains its tax-free status, but you cannot make new contributions until you return to UK residency.
What is a flexible ISA?
A flexible ISA allows you to withdraw money and replace it in the same tax year without the replacement counting against your £20,000 annual allowance. Not all ISA providers offer flexible ISAs — check your provider's terms. This is particularly useful for emergency funds held in a Cash ISA.
Can I contribute to an ISA and a pension in the same year?
Yes. ISA and pension allowances are completely separate. You can contribute up to £20,000 to ISAs and up to £60,000 (or 100% of earnings, whichever is lower) to pensions in the same tax year. Many financial planners recommend using both — pension first for tax relief, ISA for flexibility.
What happens to my ISA when I die?
Your ISA loses its tax-free status on death, but there are two protections. First, your spouse or civil partner receives an Additional Permitted Subscription (APS) equal to your ISA value, allowing them to shelter that amount in their own ISA. Second, your ISA continues to earn returns tax-free for up to 3 years while the estate is administered — known as a "continuing bond". Note that unlike pension drawdown funds, ISAs do form part of your estate for inheritance tax purposes.
Do ISAs form part of your estate for inheritance tax? →