What it is
An ISA (Individual Savings Account) is a UK account that shelters savings and investments from tax. There are four types: cash ISA, stocks and shares ISA, innovative finance ISA and Lifetime ISA.[1] In a stocks and shares ISA you do not pay tax on income or capital gains from the investments.[2]
The numbers for the 2026 to 2027 tax year
| Limit | |
|---|---|
| Total you can pay into ISAs | £20,000 |
| Of which into a Lifetime ISA | up to £4,000 |
| Tax year | 6 April to 5 April |
The figures are from GOV.UK.[1][2] You can put the whole £20,000 into one account or split it across several.
Who can open one
You must be 18 or over and resident in the UK. For a Lifetime ISA you must also be under 40.[1]
What it can hold
A stocks and shares ISA can hold shares in companies, unit trusts and investment funds, corporate bonds and government bonds.[2] A global index fund or index ETF offered by your platform can therefore be held in it.
What it means for an index saver
- No tax on the growth. Dividends and gains inside the ISA are not taxed, so the whole amount keeps compounding.
- No tax when you take money out. Withdrawals from an ISA are not taxed.
- The allowance does not carry over. What you do not use in one tax year is lost, so regular monthly saving uses it steadily.
- Platform costs still apply. The ISA removes the tax, not the fund fee or the platform charge.
Example: saving £350 a month is £4,200 a year, well inside the £20,000 allowance. See what it becomes in the calculator.
Common questions
Can I have more than one ISA?
Yes. You can split the £20,000 allowance across different ISAs. The total paid in during the tax year must not exceed the allowance.
Is a stocks and shares ISA safe?
The ISA is only the tax wrapper. The investments inside it can fall as well as rise, so you can get back less than you put in.
Sources & further reading
We cite independent authorities so you can verify everything yourself. Last reviewed 15 Sept 2026.