How to Use Your ISA Allowance Before the Tax Year Ends

March 12, 2026

The ISA allowance for 2025/26 is £20,000 and it expires on 5 April 2026. If you do not use it, you lose it. Here is everything you need to know about making the most of your ISA before the deadline.

Every UK adult has an annual ISA allowance. For the 2025/26 tax year that allowance is £20,000. It is one of the most straightforward ways to grow your money free of tax, but there is a catch: you must use it before 5 April 2026 or the allowance disappears permanently.

For couples, the combined household allowance is £40,000. Used properly over a number of years, ISAs can build substantial tax-free wealth.

What Is the ISA Allowance?

An ISA (Individual Savings Account) is a tax wrapper. Money held inside an ISA grows free from Capital Gains Tax and Income Tax. You can invest in a wide range of assets within a Stocks and Shares ISA, or simply hold cash in a Cash ISA.

The key rule is that the allowance is use it or lose it. You cannot roll unused allowance from one tax year into the next. If you have not used any of your £20,000 allowance by 5 April 2026, the opportunity is gone.

Types of ISA Available in 2025/26

You can split your £20,000 across different ISA types in the same tax year.

• Cash ISA: Interest paid free of tax. Rates vary by provider. Best for short-term savings or emergency funds.
• Stocks and Shares ISA: Invest in funds, shares, investment trusts and ETFs. All growth and income is free of tax. Suitable for medium to long-term goals.
• Innovative Finance ISA: Holds peer-to-peer loans and other alternative investments. Higher risk than cash but potentially higher returns.
• Lifetime ISA (LISA): Open to those aged 18 to 39. Government adds a 25% bonus on contributions up to £4,000 per year. Can be used for a first home purchase or retirement from age 60.

Most people benefit from a Stocks and Shares ISA for long-term wealth building. For shorter-term goals or emergency funds, a Cash ISA offers security and tax-free interest.

Why Acting Before the Deadline Matters

The benefit of acting early goes beyond simply using the allowance. Money invested in an ISA in March rather than the following April has an additional full year of tax-free growth. Over time, this compounding advantage is significant.

Suppose you invest £20,000 in a Stocks and Shares ISA each year from age 40 to 60. At an average annual return of 5%, the difference between investing in April versus waiting until the following March could amount to thousands of pounds in additional tax-free growth over two decades.

The Bed and ISA Strategy

If you hold investments outside an ISA that have grown in value, a bed and ISA strategy may be worth considering. This involves selling non-ISA investments to crystallise a gain within your Capital Gains Tax allowance, then immediately repurchasing equivalent investments inside your ISA. Future growth is then sheltered from CGT.

This does involve a brief period out of the market, which carries some risk. Professional advice is recommended before using this approach.

Junior ISAs: Saving for Children and Grandchildren

If you have children or grandchildren under 18, a Junior ISA (JISA) is a powerful way to build a tax-free fund for their future. The JISA allowance for 2025/26 is £9,000 per child.

Like adult ISAs, all growth within a JISA is free from Income Tax and Capital Gains Tax. The child cannot access the money until they turn 18, making it ideal for long-term goals such as university costs or a first property deposit.

Parents, grandparents and other family members can all contribute, up to the annual limit.

Common ISA Mistakes to Avoid

• Missing the deadline: The 5 April cutoff is firm. Set a calendar reminder for late March.
• Holding too much in cash: A Cash ISA offers security, but inflation can erode the real value of cash over time. For long-term goals, a Stocks and Shares ISA usually performs better.
• Not using a Lifetime ISA if eligible: If you are under 40, a LISA offers a free 25% government top-up on contributions — one of the best returns available with no investment risk.
• Forgetting the Junior ISA allowance: Many families focus on their own ISA and forget the £9,000 JISA allowance for children.
• Paying into more than one of the same ISA type: You can only pay into one Cash ISA and one Stocks and Shares ISA per tax year (though you can use both types in the same year).

Frequently Asked Questions

Can I put £20,000 in multiple ISAs?

Yes. You can split the £20,000 allowance across different ISA types in the same tax year, provided you do not exceed the total limit. For example, you could put £10,000 in a Cash ISA and £10,000 in a Stocks and Shares ISA.

Can I carry forward unused ISA allowance?

No. Unlike pension allowances, unused ISA allowance cannot be carried forward to the next tax year. If you do not use it by 5 April, it is lost.

Is a Stocks and Shares ISA safe?

The value of investments within a Stocks and Shares ISA can fall as well as rise. You may get back less than you invest. However, over the long term, investing in diversified funds has historically outperformed cash savings. The ISA wrapper itself simply means growth is free of tax.

When does the ISA allowance reset?

The ISA allowance resets on 6 April each year. From that date, every eligible adult in the UK has a fresh £20,000 to invest in ISAs.

For a complete overview of all the allowances available before the tax year ends, read our tax year end planning guide.

Get in touch with Off Piste Wealth to discuss how to make the most of your ISA allowance before the deadline.