Last updated: 14 October 2026
Should you invest in an ISA now or wait until the new tax year?
If you haven’t used this year’s allowance, invest before 5 April, because unused ISA allowance can’t be carried forward. You can then use the next year’s £20,000 allowance from 6 April. Investing earlier in the tax year also gives your money longer to grow tax-free. The overall ISA allowance stays at £20,000 until April 2030, but from 6 April 2027 the cash ISA limit for people under 65 falls to £12,000, so savers who prefer cash may want to use the full £20,000 in cash in 2026/27.
ISA allowances
| Tax year | Overall limit | Cash ISA limit (under 65) | Lifetime ISA | Junior ISA |
| 2026/27 | £20,000 | £20,000 | £4,000 | £9,000 |
| 2027/28 onwards | £20,000 | £12,000 | £4,000 | £9,000 |
Savers aged 65 and over can continue to put up to £20,000 in cash ISAs after April 2027.
Why timing matters
- Use it or lose it: the allowance resets each 6 April
- Time in the market: investing at the start of the tax year gives more growth tax-free
- Bed and ISA: selling shares held outside an ISA and rebuying in an ISA crystallises gains, so you can use your £3,000 CGT exemption before 5 April
- Rates rising: savings income rates rise by 2 percentage points from April 2027, so sheltering interest matters more
Example
Hannah has £30,000 in a savings account earning 4%. She’s a higher rate taxpayer, so £700 of her £1,200 interest is taxed at 40%. In March 2027, she moves £20,000 into a cash ISA for 2026/27, then puts the remaining £10,000 into a stocks and shares ISA on 6 April 2027, as the new cash limit is £12,000. Her interest is now tax-free.
Lifetime ISA
If you’re 18 to 39, a Lifetime ISA gets a 25% government bonus on up to £4,000 a year, for a first home or retirement. It counts towards the £20,000 limit. Withdrawals for other purposes have a 25% charge.
Flexible ISAs
Some ISAs let you take money out and put it back in the same tax year without using more allowance. Check whether yours is flexible before withdrawing.
Common mistakes
- Waiting until after 5 April and losing the allowance
- Exceeding the cash ISA limit from April 2027
- Withdrawing from a non-flexible ISA and losing the allowance
- Paying into a Lifetime ISA after age 50 (not allowed)
Records to keep
Keep annual ISA statements and confirmation of transfers. Transfers between providers don’t use new allowance, so use the transfer process rather than withdrawing.
Investing regularly instead
If you don’t have a lump sum, a monthly direct debit into an ISA spreads your investment across the year and uses the allowance gradually. It also smooths out market ups and downs. Set up the payments in April so the full allowance can be used by the following 5 April.
Frequently asked questions
Can I open more than one ISA a year?
Yes, since April 2024.
Can I transfer old ISAs?
Yes, without affecting this year’s allowance.
Is ISA income reported?
No.
Do ISAs pass to a spouse on death?
Yes, through an additional permitted subscription.
Related: tax implications of ISAs, interest from a closed account and building society bonuses.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with ISA timing and allowances. See our tax refund accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
