ISA, LISA, pension: the tax-free bubbles

Questions you'll answer

Quick facts

• You can put in up to £20,000 a tax year across all your ISAs → ISA. The overall ISA allowance for 2026/27.
• The government adds a 25% bonus, for a first home or later life → Lifetime ISA. LISA: up to £4,000 a year in, earning up to £1,000 bonus.
• Your employer has to add money when you're auto-enrolled → Pension. Workplace pensions: employer minimum 3% of qualifying earnings.
• Usually locked until your late 50s, with tax relief on the way in → Pension. Pensions trade access for tax relief and (often) employer money.
• Take money out early for anything else and a 25% charge applies → Lifetime ISA. The LISA withdrawal charge also eats some of your own money.
• Myth: “A Stocks & Shares ISA protects your money from market falls.” — It protects you from tax. The investments inside can still fall.
• Fact: “Opting out of a workplace pension means losing the employer's contributions.” — The employer only pays in while you're a member.
• Fact: “The cash part of the ISA allowance falls to £12,000 for under-65s from 6 April 2027.” — The overall ISA allowance stays at £20,000; the cash-only limit changes.

More in Build Wealth the Boring Way

• The rule of 72
• Start at 22 vs start at 32
• Inflation vs your savings rate
• Index funds and the fee drag
• Risk, spreading and one meme coin
• Time in the market, not timing it

All 13 Build Wealth the Boring Way lessons

Related topics

• Investing Basics
• Pensions
• Saving & Emergency Funds