ISAs: the tax-free bubble
Lesson 8 of 12 in our free Saving & Emergency Funds guide: a 5-minute money game with the key points below.
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Questions you'll answer
Mo put £3,500 into his ISAs this tax year. How much more can he add before 5 April?
Quick facts
- Tax-free savings interest, money stays as cash → Cash ISA. Cash ISA — like a savings account in a tax-free bubble.
- Investments like funds, value can go up and down → Stocks & Shares ISA. Stocks & Shares ISA — growth is tax-free but your money is at risk.
- Government adds a 25% bonus for a first home or later life → Lifetime ISA. Lifetime ISA — for ages 18–39 to open.
- Myth: “Unused ISA allowance carries over to the next tax year.” — It resets every 6 April. Use it or lose it (no pressure — most students don't fill it!).
- Fact: “The ISA allowance is shared across all your ISAs.” — £20,000 total across cash, stocks & shares, Lifetime (up to £4,000) and others.
- Fact: “From 6 April 2027, the cash ISA limit for under-65s is set to drop to £12,000.” — The overall £20,000 allowance stays, but only £12,000 of it can go into cash ISAs for under-65s.