Last updated: 30 March 2026
The ISA allowance deadline falls on 5 April every year, and once it passes, any unused portion of your £20,000 tax-free allowance is gone for good. Whether you are looking at a Stocks and Shares ISA, a Cash ISA, or a personal pension, the clock is ticking on the 2025/26 tax year.
This year, there are extra reasons to pay attention. Dividend tax rates are rising from 6 April 2026, and the Cash ISA allowance is being cut from 2027. Here is how to make the most of your allowance before the reset.
Disclaimer: This is not financial advice. Investing involves risk and you can lose money. Always do your own research or speak to a qualified financial adviser before making decisions about your money.
Why the ISA allowance deadline matters
Every UK resident aged 18 or over gets a £20,000 annual ISA allowance. That is the total you can contribute across all your ISAs (Cash, Stocks and Shares, Innovative Finance, and Lifetime) in a single tax year, completely free from income tax, capital gains tax, and UK dividend tax.
The catch is simple: it is use it or lose it. Any allowance you do not use by 11:59pm on 5 April 2026 disappears. It does not roll over, it does not stack, and it cannot be reclaimed. Moreover, the allowance has been frozen at £20,000 since 2017/18, so inflation is quietly shrinking its real value every year.
Why the 2025/26 deadline matters more than usual
In most years, the ISA allowance deadline is a routine reminder. This year, however, two specific tax changes make it more consequential.
Dividend tax is rising from 6 April 2026
From the start of the 2026/27 tax year, dividend tax rates are increasing by 2 percentage points. The basic rate moves from 8.75% to 10.75%, and the higher rate rises from 33.75% to 35.75%. The additional rate stays at 39.35%. According to GOV.UK, this will raise an estimated £280 million in additional tax in the first year alone.
For context, a higher-rate taxpayer receiving £20,000 in dividends will pay roughly £390 more per year from April 2026. Dividends received inside an ISA, however, remain completely tax-free. As a result, moving dividend-paying investments inside an ISA wrapper before the deadline shields them from the increase entirely. For a deeper look at what this means in practice, see our guide to the dividend tax rise.
Cash ISA allowance is being cut from April 2027
From the 2027/28 tax year, the Cash ISA allowance will drop from £20,000 to £12,000 for savers under 65. The Stocks and Shares ISA allowance stays at £20,000. This means the 2025/26 and 2026/27 tax years are the last chances to shelter a full £20,000 in cash inside an ISA before the cap comes into effect.
Can you pay into more than one ISA?
Yes. Since April 2024, you can pay into multiple ISAs of the same type in a single tax year, as long as your total contributions across all ISAs do not exceed £20,000. So you could split your allowance between two different Stocks and Shares ISA providers, for example. The one exception is the Lifetime ISA, where you can only pay into one per year (up to £4,000, which counts towards your overall £20,000).
This flexibility makes it easier to spread your investments across platforms that suit different needs.
Where to put your ISA allowance
There are broadly two approaches: pick your own investments, or hand it to a professional team. Here are the strongest options right now.
DIY investing: Lightyear, Trading 212, or Freetrade
If you want to choose your own stocks, ETFs, and funds, the three main contenders are:
- Lightyear — 0.10% FX fee, no platform fee, no commissions. The cheapest all-rounder for UK, US, and EU stocks. Multi-currency accounts let you hold GBP, USD, and EUR.
- Trading 212 — 0.15% FX fee, no platform fee, around 14,000 instruments, and a popular auto-invest Pies feature.
- Freetrade — Free ISA on the Basic plan. FX fees are higher (0.99% on Basic) but Freetrade is one of the few app-based platforms offering a SIPP alongside an ISA.
For a full side-by-side breakdown of what each platform charges, see our cheapest investment app UK: FX fees compared guide.
Hands-off investing: Monzo Invest or J.P. Morgan Personal Investing
If you would rather not pick individual stocks, managed options take the work off your hands.
Monzo Invest lets you invest from £1 into BlackRock managed funds directly inside the Monzo app. The platform fee is 0.25% per year (0.20% with Monzo Plus, Premium, Perks, or Max). It is the simplest entry point for beginners.
J.P. Morgan Personal Investing (formerly Nutmeg) offers professionally managed portfolios with ISAs, Lifetime ISAs, Junior ISAs, and pensions. Annual management fees start at 0.45% for Fixed Allocation portfolios. There is currently a promotional offer of six months at 0% management fees for new customers who invest £500 or more.
For a broader comparison of all these platforms, see our best investment ISA 2026 guide. And if you want to stack sign-up bonuses, our best investment referral deals UK page covers the latest offers.
Pensions: an extra layer of tax relief
Your ISA allowance is not the only tax-efficient option resetting in April. Topping up a personal pension (SIPP) before the tax year ends can deliver significant upfront tax relief.
The current annual pension allowance is £60,000 (or 100% of your earnings, whichever is lower). Basic-rate taxpayers get 20% tax relief added automatically. Higher-rate taxpayers can claim back an additional 20% through their tax return. If you have not used all your pension allowance, you may also carry forward unused allowance from the previous three tax years.
Both Freetrade and J.P. Morgan Personal Investing offer SIPPs alongside their ISAs, so you can manage both in one place. For a full breakdown of everything to check before the tax year ends, see our tax year end checklist.
What to do before 5 April
First, check how much of your £20,000 ISA allowance you have used this tax year. If you are unsure, your ISA provider can tell you. Second, decide whether you want to invest yourself or have it managed. Third, if you are a higher-rate taxpayer, consider whether additional pension contributions make sense. And finally, do not leave it until the last day. Platforms can take time to process contributions, and your money needs to reach your provider before midnight on 5 April.
Remember, you can deposit cash into your ISA to secure the tax-free wrapper now, then decide what to invest in later. The key is getting the money inside the ISA before the deadline.
Frequently asked questions
What happens if I miss the ISA allowance deadline?
Your unused allowance is lost. You cannot carry it forward. A new £20,000 allowance opens on 6 April, but it does not include anything left over from the previous year.
Can I put £20,000 into a Stocks and Shares ISA and £20,000 into a Cash ISA?
No. The £20,000 is a combined total across all ISA types. You can split it however you like, but the total must not exceed £20,000 in a single tax year.
Is a Stocks and Shares ISA risky?
Yes, all investing carries risk. Unlike a Cash ISA, the value of your investments can fall as well as rise. A Stocks and Shares ISA is generally considered a medium-to-long-term investment (five years or more). If you are unsure, speak to a qualified financial adviser.
Should I use an ISA or a pension?
They serve different purposes. An ISA gives you flexible, tax-free access at any time. A pension locks your money away until retirement (currently age 55, rising to 57 in 2028) but offers upfront tax relief that can significantly boost your contributions. Many people use both.
Can I transfer an existing ISA to a new provider?
Yes. You can transfer ISAs from previous tax years without affecting your current year's allowance. Always use your provider's official transfer process rather than withdrawing and redepositing, as withdrawing could mean losing tax-free status on that amount.
Which platform is best for an ISA?
It depends on what you want. For a detailed comparison covering fees, features, and who each platform suits, see our best investment ISA 2026 guide and our FX fees comparison.
Capital at risk. The value of your investments can go down as well as up, and you may get back less than you invest. Tax treatment depends on individual circumstances and may change. This article is not financial advice.
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