ISA Calculator 2025-26 —
Stocks & Shares, Cash ISA & LISA Comparison

The annual ISA allowance for 2025-26 is £20,000. This is unchanged since 2017-18 and applies to UK residents aged 16 and over (18+ for Stocks & Shares ISA and Innovative Finance ISA). You can split the £20,000 across multiple ISA types in the same tax year: for example, £10,000 into a Cash ISA and £10,000 into a Stocks & Shares ISA. If you include a Lifetime ISA (LISA), the £4,000 LISA contribution counts toward the £20,000 total — leaving £16,000 for other ISA types.

If you invest £500 per month (£6,000/year) into a Stocks & Shares ISA at a 7% annual return (broadly the historical long-run UK equity total return), after 10 years the balance would be approximately £82,700. After 20 years at the same rate: around £246,000. After 30 years: around £567,000. All growth, dividends, and withdrawals are tax-free inside the ISA. The same contributions in a taxable account at 7% gross but 20% tax drag on returns would produce around £74,900 after 10 years — roughly £7,800 less.

Over long horizons (10+ years), Stocks & Shares ISAs have historically outperformed Cash ISAs significantly. UK equity total returns have averaged 7-8% nominal per year over rolling 20-year periods vs cash savings rates of 1-5%. However, Stocks & Shares ISAs carry investment risk — your capital can fall in value, particularly in the short term. Cash ISAs are appropriate for money needed within 3-5 years or for emergency funds. For goals 5+ years away, most financial planners and the FCA broadly favour equities inside a tax-free ISA wrapper. Past performance does not guarantee future returns.

Yes. Since the April 2024 reforms, you can open and contribute to multiple ISAs of the same type in the same tax year (with multiple providers), not just one of each type. You can hold a Cash ISA, Stocks & Shares ISA, Innovative Finance ISA, and LISA simultaneously and split contributions across all of them — as long as your total contributions do not exceed the £20,000 annual allowance (with the LISA sub-limit of £4,000). One exception: you may only open one LISA per tax year.

Contributions to a SIPP attract upfront tax relief (20% basic-rate relief added automatically via relief at source; 40/45% taxpayers claim extra relief via self-assessment). Contributions to an ISA receive no upfront tax relief — you invest after-tax money. However, SIPP withdrawals are partially taxable (only 25% is tax-free; the rest is income taxed at your marginal rate at retirement). ISA withdrawals are 100% tax-free. ISA money is also accessible at any age — SIPPs are locked until age 55 (rising to 57 from 2028). Many UK savers use both: SIPP for employer-matched contributions and higher-rate relief, ISA for flexible, accessible tax-free savings.

Bed and ISA means selling investments held in a general investment account (GIA) and repurchasing them inside an ISA wrapper to shelter future growth from tax. The sale realises a capital gain (which may be taxable if above the £3,000 annual exempt amount) or loss (which can be used to offset gains). But all future growth on the repurchased assets is then sheltered from CGT and income tax. With CGT rates now 18%/24% (post-October-2024 Budget), bed-and-ISA is particularly valuable for higher-rate taxpayers holding investments outside an ISA.

A flexible ISA lets you withdraw money and re-deposit it in the same tax year without it counting against your annual allowance again. For example, if you deposit £20,000 in April, then withdraw £5,000 in October, you can re-deposit that £5,000 before 5 April and stay within your £20,000 limit. Not all ISA providers offer flexible ISA terms — check with your provider. Stocks & Shares ISAs from major platforms (Vanguard, Hargreaves Lansdown, AJ Bell, Fidelity) vary on this feature. LISAs are not flexible.

No. Income and growth inside an ISA is completely exempt — it does not appear on your tax return, does not count toward the personal savings allowance (£1,000 basic-rate / £500 higher-rate), and does not affect means-tested benefits, tax credits, or Universal Credit calculations. This makes ISAs particularly powerful for people near income-tested thresholds. By contrast, dividend income, savings interest, and capital gains outside an ISA all count toward various thresholds.