UK ISA Calculator (Cash & Stocks and Shares)
See exactly how your ISA grows over time — completely free of UK income tax and capital gains tax. Compare cash ISA rates against expected stock market returns.
ISA Guide
ISA Allowance 2026/27
The annual ISA allowance is £20,000 per person. You can split this between a cash ISA, stocks and shares ISA, innovative finance ISA, and Lifetime ISA (capped at £4,000). Unused allowance cannot be carried over to the next tax year. Couples can invest £40,000 per year combined — one of the most efficient tax shelters available to UK residents.
Cash ISA vs Stocks and Shares ISA
Cash ISAs offer certainty — your capital is protected and you earn a fixed or variable interest rate. Stocks and shares ISAs invest in the market — historically returning 7–10% annually over long periods, but with year-to-year volatility. For time horizons under 5 years, cash is generally safer. For 10+ years, the historical evidence strongly favours equities despite short-term risk.
The Lifetime ISA (LISA)
The Lifetime ISA lets you save up to £4,000 per year and receive a 25% government bonus (up to £1,000 per year). It can only be used to buy your first home (under £450,000) or for retirement from age 60+. Withdrawing for any other reason incurs a 25% penalty — which effectively means losing your bonus plus some of your own contributions.
Power of ISA Compounding
Because ISA gains are never taxed, the compounding effect is significantly greater than a taxable account over long periods. A basic rate taxpayer investing £10,000 per year at 7% for 30 years: in an ISA — approximately £944,000. In a taxable account — approximately £755,000 (assuming gains are taxed each year). The difference grows with time and is even larger for higher rate taxpayers.
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