UK ISA Calculator
Calculate how your ISA grows tax-free with compound interest. See projections for Cash ISAs and Stocks & Shares ISAs with the £20,000 annual allowance (2025/26).
Your ISA details
Include any existing ISA savings to project total growth.
Maximum £20,000 per tax year (≈ £1,666/month)
Current best Cash ISA rates are around 4-5% AER.
100% tax-free growth
All interest, dividends, and capital gains in your ISA are completely tax-free. You never need to declare ISA income on your tax return.
Tax-free growth projection
ISA balance after 10 years
£252,942
Worth £197,598 in today's money
Total contributions
£200,000
Tax-free growth
£52,942
Estimated tax saved vs taxable account
~£10,588
Based on 20% basic rate tax on interest
Year-by-year breakdown
| Year | Balance | Growth | Real value |
|---|---|---|---|
| 1 | £20,494.27 | +£494.27 | £19,994.41 |
| 2 | £41,930.04 | +£1,435.77 | £39,909.61 |
| 3 | £64,350.56 | +£2,420.52 | £59,755.89 |
| 4 | £87,801.08 | +£3,450.52 | £79,543.45 |
| 5 | £112,328.91 | +£4,527.83 | £99,282.39 |
| 6 | £137,983.55 | +£5,654.64 | £118,982.78 |
| 7 | £164,816.76 | +£6,833.21 | £138,654.61 |
| 8 | £192,882.68 | +£8,065.92 | £158,307.80 |
| 9 | £222,237.94 | +£9,355.26 | £177,952.22 |
| 10 | £252,941.78 | +£10,703.84 | £197,597.71 |
ISA allowances and limits (2025/26)
| ISA Type | Annual Limit | Notes |
|---|---|---|
| Cash ISA | £20,000 | Part of overall £20k limit |
| Stocks & Shares ISA | £20,000 | Part of overall £20k limit |
| Lifetime ISA (LISA) | £4,000 | Part of £20k limit + 25% bonus |
| Junior ISA | £9,000 | Separate allowance for under 18s |
| Total ISA allowance | £20,000 | Combined across all adult ISA types |
Why use an ISA?
Tax-free interest
All interest earned in a Cash ISA is completely tax-free, unlike regular savings accounts where you may pay tax above your Personal Savings Allowance.
Tax-free gains
In a Stocks & Shares ISA, all dividends and capital gains are tax-free. No dividend tax, no Capital Gains Tax — ever.
No tax return
You never need to declare ISA income or gains on your tax return. The tax wrapper handles everything automatically.
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Frequently asked questions
What is the ISA allowance for 2025/26?
The ISA allowance for the 2025/26 tax year is £20,000. This is the maximum you can pay into ISAs each tax year across all types of ISA (Cash ISA, Stocks & Shares ISA, Innovative Finance ISA, and Lifetime ISA). The allowance resets on 6 April each year and cannot be carried forward.
Is ISA interest really tax-free?
Yes, all interest, dividends, and capital gains earned within an ISA are completely tax-free. You don't need to declare ISA income on your tax return. This makes ISAs one of the most tax-efficient ways to save and invest in the UK, especially for higher-rate taxpayers.
What is the difference between a Cash ISA and Stocks & Shares ISA?
A Cash ISA holds cash savings and pays interest like a savings account, but tax-free. A Stocks & Shares ISA holds investments like funds, shares, and bonds. Cash ISAs offer lower risk but typically lower returns; Stocks & Shares ISAs offer potential for higher returns but with investment risk. You can split your £20,000 allowance between both types.
Can I withdraw money from my ISA?
Yes, you can withdraw from most ISAs at any time (except Lifetime ISAs before age 60, which incur a 25% penalty). With a "flexible ISA", you can withdraw and replace money in the same tax year without it counting towards your allowance. Not all ISAs are flexible, so check with your provider.
What happens if I exceed the £20,000 ISA limit?
If you pay more than £20,000 into ISAs in a tax year, HMRC will contact you to remove the excess and any growth on it. The excess will then be subject to normal tax rules. It's important to track your contributions across all ISA providers.
Should I use my full ISA allowance?
If you can afford to, yes. The ISA allowance doesn't roll over, so any unused allowance is lost at the end of the tax year. Even if you're unsure about investments, a Cash ISA protects your savings from tax. For long-term goals, a Stocks & Shares ISA may offer better growth potential.
What is a Lifetime ISA (LISA)?
A Lifetime ISA is for adults aged 18-39 saving for their first home or retirement. You can save up to £4,000 per year (part of your £20,000 total allowance) and receive a 25% government bonus (up to £1,000 per year). Withdrawals for purposes other than a first home or retirement after age 60 incur a 25% penalty.
How does compound interest work in an ISA?
Compound interest in an ISA works the same as regular compound interest, but with a crucial advantage: all growth is tax-free. This means 100% of your interest is reinvested and compounds, rather than losing a portion to tax each year. Over long periods, this tax-free compounding can significantly boost your returns.