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Historical Annual ISA Allowances

What is an ISA?

An Individual Savings Account, or ISA, is a savings account or investment account that protects your money from both income tax (on interest or dividends) and capital gains tax (on any profits you make). There is a limit to how much you can put into your ISA accounts each year in the UK, and this is referred to as your annual ISA allowance.

Currently, every UK resident aged 16 and over gets an annual ISA allowance of up to £20,000. Children under the age of 16 can get a Junior ISA instead. It is ‘use it or lose it’, though. At the start of each tax year on 6th April you get another annual ISA allowance.

What types of ISA are there?

There are four main types and they are:

  • Cash ISAs
  • Stocks & Shares ISAs
  • Innovative Finance ISAs
  • Lifetime ISAs

You can probably guess what you can have in Cash ISAs and Stocks & Shares ISAs!

Innovative Finance ISAs allow you to invest in peer-to-peer loans (where you lend your money to lots of other people or companies, just like a bank does).

Lifetime ISAs can include either cash or stocks & shares but the proceeds have to be used to buy your first home or for your retirement. You must be aged 18 to 39 to open one but you can put money into an already open Lifetime ISA until you’re 50. The government adds a 25% bonus to the amount you put in.

You can put money into one of each of these four types of ISAs every tax year as long as the combined amount you put in does not exceed your UK ISA allowance of £20,000. There is a lower limit of £4,000 for Lifetime ISAs.

Is a cash ISA worth it?

Good question! While cash ISAs have always been popular, there are a few factors that have worked against them in recent years.

Firstly, the interest rate on all savings accounts have come down and many cash ISAs now pay less than the rate of inflation, meaning the purchasing power of your money shrinks over time.

Secondly, the rates on cash ISAs have fallen below those offered on non-ISA savings accounts, meaning you may receive less interest from a cash ISA even after the income tax savings they can produce.

Thirdly, and perhaps most importantly, there is now a savings allowance which means everyone can now earn up to £1,000 of interest a year tax-free (£500 if you are a higher or additional rate taxpayer). With savings rates so low, few people have enough to exceed these limits, making cash ISAs much less attractive.

All of these factors could change in time but, for now at least, cash ISAs look much less appealing for the vast majority of savers.

Should you get a cash ISA, investment ISA, innovative finance ISA or Lifetime ISA?

Which type of ISA you get will depend on what you are aiming to achieve with your money and your own unique personal circumstances. 

Lifetime ISAs are designed for younger people looking to buy their first home or save for their retirement. So they are less flexible than the other types of ISA and you can put less into them.

Investment and Innovative Finance ISAs are designed to be held for longer periods so if you think you may need access to your money at short notice then a cash ISA may be more appropriate.  

Of course, it’s possible to put money into all four types of ISA in the same tax year, as long as you don’t exceed your annual ISA allowance, so they are not mutually exclusive.

How much can you put in an ISA?

The table below shows how the UK ISA allowance has changed since ISAs were introduced in 1999. 

Tax years run from 6 April to 5 April the following year. So, the 2021/22 tax year runs from 6 April 2021 to 5 April 2022.

History of the annual ISA allowance

Tax year Share ISA/
Total
allowance
Cash ISA Junior
ISA
Lifetime
ISA
1999/00  £7,000  £3,000  –
2000/01  £7,000  £3,000  –
2001/02  £7,000  £3,000  –
2002/03  £7,000  £3,000  –
2003/04  £7,000  £3,000  –
2004/05  £7,000  £3,000  –
2005/06  £7,000  £3,000  –
2006/07  £7,000  £3,000  –
2007/08  £7,000  £3,000  –
2008/09 £7,200  £3,600  –
2009/10 1  £7,200  £3,600  –
2010/11  £10,200  £5,100  –
2011/12  £10,680  £5,340  £3,600
2012/13  £11,280  £5,640  £3,600
2013/14  £11,520  £5,760  £3,720
2014/15 2 £15,000  £15,000  £4,000
2015/16  £15,240  £15,240  £4,080
2016/17 £15,240 £15,240 £4,080
2017/18 £20,000 £20,000  £4,128 £4,000
2018/19 £20,000 £20,000 £4,260 £4,000
2019/20 £20,000 £20,000 £4,368 £4,000
2020/21 £20,000 £20,000 £9,000 £4,000
2021/22 £20,000 £20,000 £9,000 £4,000

Notes:

1. A higher limit of £10,200 for Share ISAs and £5,100 for Cash ISAs applied for people aged over 50 from 6 October 2009.

2. Lower limits of £11,880 for Share ISAs, £5,940 for Cash ISAs and £3,840 for Junior ISAs applied until 30 June 2014.

3. 3. For simplicity, we’ve ignored a couple of changes to ISAs that have been made over the years. Up until April 2005 you could get a Life Insurance ISA (as well as Share and Cash ISAs). Prior to April 2008 there was also a distinction between Maxi ISAs (which were for shares) and Mini ISAs (which could have been for shares, cash or insurance).


 

Annual PEP allowances

Personal Equity Plans (PEPs) were introduced in 1987 and ran until April 1999 when they were replaced by ISAs. The allowances for 1987 and 1988 applied to calendar years, with the shift to tax-year allowances beginning from 6 April 1989.

Calendar
year /
Tax year
General
PEPs
Single
company
PEPs
1987 £2,400
1988 £3,000
1989/90 £4,800
1990/91 £6,000
1991/92 £6,000 £3,000
1992/93 £6,000 £3,000
1993/94 £6,000 £3,000
1994/95 £6,000 £3,000
1995/96 £6,000 £3,000
1996/97 £6,000 £3,000
1997/98 £6,000 £3,000
1998/99 £6,000 £3,000

Who can open an ISA?

There are slightly different requirements, depending on which type of ISA you want:

  • Any UK resident aged 16 or over can open a Cash ISA.
  • Any UK resident aged 18 or over can open a Stocks & Shares ISA or an Innovative Finance ISA.
  • Any UK resident aged 18 to 39 can open a Lifetime ISA.  

You can also open these ISAs if you meet the age requirement above and are a Crown servant (essentially someone who works for the UK government but lives overseas) or their spouse or civil partner.

How can you withdraw money?

You contact the provider concerned, either online, via post, or in person and ask them to withdraw part or all of your money. 

Typically there will be no charge for withdrawing your money but if you have a fixed-rate savings product you have to pay a charge or lose some interest if you withdraw your money early.

Once you have taken money out of your ISA it is no longer protected from tax, so you may want to access any other source of cash you have first.

Can you switch provider once you’re set up?

Yes, it’s fairly easy to switch ISA providers if you want to. Usually your new provider will handle the process for you once you provide them with the relevant details. 

It’s important to let the provider do this for you, rather than you taking the money out yourself and then putting it with a new ISA provider as that would count towards your annual ISA allowance. 

Can you get an ISA for your kids?

Yes, children under the age of 18 can open a similar product called a Junior ISA. The annual allowance for JISAs, as they are called, is £9,000.

They are two types: cash and stocks & shares. The child can take control of the account when they’re 16, but cannot withdraw the money until they turn 18. 

Once your child turns 18, the Junior ISA is automatically converted into an adult ISA, so the money can stay protected from tax.

Note that 16 and 17 year olds can have a cash ISA of up to £20,000 and a Junior ISA of up to £9,000, effectively giving them a total UK ISA allowance of £29,000 for two tax years.

FAQ

Can I put £20,000 in an ISA every year?

Yes, under the current rules you can put £20,000 into an ISA account every tax year (6 April to 5 April).

What is the ISA allowance for 2021/22?

The UK ISA allowance for 2021/22 is £20,000. There is a lower allowance of £4,000 for Lifetime ISAs.

Can you pay into 2 ISAs a year?

Yes, you can pay into one of each of the four types of ISA (Cash, Stocks & Shares, Innovative Finance, and Lifetime) every tax year.

That means you could pay into 4 different types of ISA in a tax year but you can’t pay into 2 cash ISAs.

What happens if I put more than £20,000 in my ISA?

If your ISA is with a single provider, they will normally have processes in place to ensure this doesn’t happen. But it can be an issue if you have ISAs with two or more providers.

HMRC normally checks its records at the end of each tax year and will ask providers to return any excess money that has been contributed and any tax payable as a result of the extra money.

You can also call HMRC on 0300 200 3300 if you become aware of the error earlier. The general advice given is not to try and fix the issue yourself by withdrawing the extra money but to let your ISA providers and HMRC fix it themselves.

Note that some, but not all ISAs, are now deemed to be Flexible ISAs. This means that you can take some money out and return it by the end of the tax year as long as the net amount you put in does not exceed the UK ISA allowance.

Therefore, you could put in £15,000, withdraw £5,000, and then put in a further £10,000 in the same tax year without breaching the limits of your annual ISA allowance.