Every type of ISA explained

The ISA family has five members, and they get on about as well as most families. They share one thing, the tax break, and argue about everything else: who can join, how much goes in, and what happens if you take money out.

Here's each one in turn, with the limits for the 2026 to 2027 tax year and the change coming in April 2027.

The rules all adult ISAs share

There are four types of adult ISA: cash, stocks and shares, innovative finance and Lifetime. In the 2026 to 2027 tax year, you can put up to £20,000 into them in total. You can use one account or split the allowance across several, including more than one of the same type.

GOV.UK's own example of a split: £15,000 in a cash ISA, £2,000 in a stocks and shares ISA and £3,000 in an innovative finance ISA. The tax year runs from 6 April to 5 April, and allowance you don't use doesn't roll over.

You need to be 18 or over and UK resident, and ISAs are always in one person's name. You can't hold one jointly.

Cash ISA

A savings account where you don't pay tax on the interest. It holds savings with banks and building societies, and some National Savings products. Easy-access and fixed-rate versions both exist, and the balance doesn't fall the way investments can.

Money with a UK bank or building society is protected by the FSCS up to £120,000 per person, per bank. That limit is per banking licence, not per ISA, so savings in other accounts with the same bank count towards it.

The April 2027 change

From 6 April 2027, people under 65 will be able to put no more than £12,000 a year into cash ISAs. People aged 65 and over can carry on saving up to £20,000 a year in cash. The overall £20,000 doesn't change, so an under-65 can still use the other £8,000 in a stocks and shares ISA, for example.

The same GOV.UK document adds restrictions on transfers from stocks and shares and innovative finance ISAs into cash ISAs, so the new cap can't be sidestepped by paying into one and moving it to the other.

Current cash ISA rates are on our ISAs page.

Stocks and shares ISA

An account for investments: shares, funds, corporate and government bonds, and long-term asset funds. You don't pay tax on income or capital gains from investments inside it.

Investments can fall in value as well as rise, so this one is for money you can leave for years. Our stocks and shares ISA guide covers it in detail.

Lifetime ISA

A Lifetime ISA is built for two things: buying your first home, or saving for later life. You must be under 40 to open one, and you can pay in up to £4,000 a year until you're 50. That £4,000 counts towards your £20,000, and you can only pay into one Lifetime ISA each tax year.

The draw is the bonus. The government adds 25% of what you pay in, up to £1,000 a year. You can hold cash, stocks and shares, or a mix.

You can take the money out without a charge in three cases. To buy your first home, if it costs £450,000 or less, you buy at least 12 months after your first payment in, you use a conveyancer or solicitor, and you buy with a mortgage. Or once you're 60. Or if you're terminally ill with less than 12 months to live.

The £450,000 cap is worth checking against prices where you want to buy. Our rent or buy calculator can help with the bigger question.

Innovative Finance ISA

The least known of the five. It holds things like peer-to-peer loans and crowdfunding debentures: you lend money to people or businesses through a platform, and earn interest if they pay it back.

The FCA describes investments held in these ISAs as generally high-risk, and warns they may not be protected by the FSCS, so you could lose the money or find it hard to get back. The ISA wrapper makes the returns tax-free. It doesn't make the loans any safer.

Moving one can be awkward too: you can transfer the cash in it, but you may not be able to transfer the investments.

Junior ISA

A Junior ISA is for a child who is under 18 and living in the UK. The limit for 2026 to 2027 is £9,000, and it's separate from the parents' own £20,000.

A parent or guardian with parental responsibility opens and manages it, but the money belongs to the child. There are cash and stocks and shares versions. The child can take control at 16, and can't take the money out until 18. At 18 it turns into an adult ISA automatically, and the money is theirs to take, which is a sentence worth reading twice before you fill it up.

Taking money out and moving it

You can take money out of an ISA at any time without losing the tax benefits, apart from the Lifetime and Junior ISA rules above. Putting it back uses up allowance again, unless the ISA is flexible. A flexible ISA lets you take cash out and replace it in the same tax year without it counting twice.

To switch providers, ask the provider you're moving to for a transfer. Don't withdraw and pay in yourself, or you lose the tax-free status of that money. Cash ISA to cash ISA transfers should take no more than 15 working days; other kinds, 30 calendar days.

Which one?

That depends on what the money is for and when you'll need it, which is a question about you rather than about ISAs. As a rough map: cash for the next few years, stocks and shares for the long run, a Lifetime ISA if you're under 40 and saving for a first home under £450,000, and a Junior ISA for a child's future. The Innovative Finance ISA is the one to approach with the most caution.