Savings & ISA
ISA Calculator
Project how your ISA savings grow with compound returns. Covers Cash ISA, Stocks & Shares ISA, and Lifetime ISA with the 25% government bonus.
Your details
Max £20,000 / year across all ISA types
UK market historical average: ~7% p.a. (not guaranteed)
Your results
Stocks & Shares ISA Growth on £6,000/year over 20 Years
Projected balance after 20 years
£208,316
£88,316 growth earned
- Total contributions
- £120,000
- Growth earned
- £88,316
- Final balance
- £208,316
Breakdown
Contributions made at the start of each year, growth applied annually
| Year | Contribution | Growth | Balance |
|---|---|---|---|
| Year 1 | £6,000 | £300 | £6,300 |
| Year 2 | £6,000 | £615 | £12,915 |
| Year 3 | £6,000 | £946 | £19,861 |
| Year 4 | £6,000 | £1,293 | £27,154 |
| Year 5 | £6,000 | £1,658 | £34,811 |
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Frequently asked questions
How the ISA Calculator works
An Individual Savings Account (ISA) is a tax-free wrapper: interest, dividends, and capital gains earned inside an ISA are never subject to UK tax. This calculator shows how much of your £20,000 annual allowance you have used across different ISA types, and projects how your ISA portfolio could grow tax-free over time using compound interest.
The £20,000 annual allowance
The ISA allowance resets each tax year on 6 April and cannot be carried forward. You can split it however you like across a Cash ISA, Stocks and Shares ISA, Innovative Finance ISA, and a Lifetime ISA (up to £4,000 of your allowance). Unused allowance is lost permanently. Even £1 a day unused costs you £365/year of tax-free capacity.
Cash ISA vs Stocks and Shares ISA
A Cash ISA earns interest tax-free, making it especially valuable for higher and additional-rate taxpayers who have already used their Personal Savings Allowance (£500 for higher rate, £0 for additional rate). A Stocks and Shares ISA invests in funds, shares, or bonds, historically producing higher long-term returns than cash but with more short-term volatility. For money you don't need for 5+ years, a Stocks and Shares ISA typically grows significantly more.
The Lifetime ISA (LISA)
The Lifetime ISA is available to 18–39 year olds and adds a 25% government bonus (up to £1,000/year) on contributions up to £4,000/year. It can only be used to buy a first home (up to £450,000) or from age 60. Withdrawing for any other reason incurs a 25% government penalty which actually returns less than you put in. Use the Lifetime ISA Calculator to compare it with a pension for retirement savings.
Savings & Investing Guide
How ISAs work in the UK
An Individual Savings Account (ISA) is a tax-free savings or investment wrapper available to UK residents aged 18 and over. Any interest, dividends, or capital gains earned inside an ISA are completely free of UK tax — you do not even need to declare them on a Self Assessment return. Each tax year (6 April to 5 April) you can invest up to £20,000 across all your ISAs combined.
Types of ISA
There are four main types available to adults. A Cash ISA pays interest tax-free, much like a bank account, and is offered by banks and building societies. A Stocks and Shares ISA lets you hold shares, funds, ETFs, and bonds — all gains and income are sheltered from tax. An Innovative Finance ISA wraps peer-to-peer loans, which carry higher risk than the other types. A Lifetime ISA (LISA) is specifically for buying a first home or retirement, comes with a 25% government bonus, but has strict withdrawal rules. You can also open a Junior ISA for a child, with a separate allowance of £9,000 per tax year in 2025/26.
The £20,000 annual allowance
The £20,000 limit applies to the total you pay in across all your ISAs in a single tax year. You can split it however you like — for example £10,000 in a Cash ISA and £10,000 in a Stocks and Shares ISA — but you can only subscribe to one account of each type per tax year. Unused allowance cannot be rolled over: if you invest £5,000 this tax year, the remaining £15,000 is lost at 5 April. Once money is inside an ISA it can stay there indefinitely and continues to grow tax-free regardless of the annual allowance.
The Lifetime ISA explained
You can open a Lifetime ISA between ages 18 and 39, and pay in up to £4,000 per tax year (which counts toward the £20,000 total allowance). The government adds a 25% bonus — up to £1,000 per year — directly into your account. Funds can be used to buy a first home worth up to £450,000, or withdrawn tax-free from age 60. Withdrawing for any other reason incurs a 25% government charge, which effectively claws back the bonus and penalises a small portion of your own contributions. LISAs are therefore best suited to those certain they will use them for one of the two qualifying purposes.
Tax on ISA gains versus a general investment account
Outside an ISA, investment returns are taxable. Dividends above the £500 annual allowance (2025/26) face dividend tax at 8.75% (basic rate) or 33.75% (higher rate). Capital gains above the £3,000 annual exempt amount are taxed at 18% or 24% on residential property, or 18% or 24% on other assets depending on your tax band. Interest is taxed as income above the Personal Savings Allowance (£1,000 for basic-rate taxpayers, £500 for higher-rate). Inside a Stocks and Shares ISA none of these taxes apply, making the wrapper particularly valuable for higher-rate taxpayers and those holding dividend-paying or high-growth investments.
Flexible ISAs and transferring providers
Some Cash ISAs are 'flexible', meaning you can withdraw and replace money within the same tax year without the replacement counting against your annual allowance. Most Stocks and Shares ISAs are not flexible, so check before withdrawing if you plan to reinvest. You can transfer your ISA to a different provider at any time without losing tax-free status or using up allowance — always use the formal ISA transfer process rather than withdrawing and redepositing, which would consume your allowance unnecessarily.
Sources & methodology
Built and maintained by Tim, a personal finance enthusiast (not a financial adviser). Last reviewed April 2026. Rates and thresholds come from official UK government publications.
- GOV.UK: Individual Savings Accounts · ISA allowances, types and eligibility rules
- HMRC: Lifetime ISA · LISA bonus, withdrawal rules and limits
Figures are estimates only. This is not financial or tax advice. For help with your specific situation, speak to HMRC or a qualified adviser.