Cash ISA Limit 2025 Explained (Everything You Need to Know)

The Cash ISA limit for the 2025/26 tax year is one of the most searched financial topics in the UK right now — and for good reason. Millions of savers want to protect their money from tax, but the rules can feel confusing.

This guide breaks down the Cash ISA limit in the simplest way possible, so you know exactly how much you can save tax-free.

---

What Is the Cash ISA Limit in 2025?

The Cash ISA allowance for the 2025/26 tax year is:

£20,000 per person, per tax year

You can deposit the full £20,000 into:

• A Cash ISA, OR
• Split it across different ISAs (Stocks & Shares, Lifetime ISA, Innovative Finance ISA)

There’s no tax on interest earned inside the ISA — even if rates increase.

---

Who Can Open a Cash ISA?

To open a Cash ISA, you must be:

• A UK resident
• 16+ years old
• Holding a UK National Insurance number

That’s it.

---

Why the Cash ISA Limit Matters

Because inflation and rising interest rates mean more people are earning interest — and potentially paying tax on it.

With a Cash ISA:

• All your interest is 100% tax-free
• You can avoid paying tax on interest even if you exceed the Personal Savings Allowance
• You can save up to £20,000 every year
• Your money is FSCS-protected up to £85,000

---

How the Cash ISA Allowance Works

The ISA year runs from:

6 April → 5 April the next year

Example:

If you save:

• £5,000 in May
• £10,000 in August
• £5,000 in January

You’ve used your full £20,000 allowance for that tax year.

---

Can You Carry Forward Unused ISA Allowance?

No.

If you don’t use your ISA limit by April 5th, it resets and you lose it permanently.

Use it or lose it.

---

What Happens If You Go Over the Limit?

Your provider will:

• Reject the payment, OR
• Freeze the overpayment and alert HMRC

HMRC may require you to withdraw the excess.

Avoid this by tracking deposits.

---

Best Cash ISA Providers for 2025

Looking for the best rates? Check out our Best Cash ISA Accounts 2025 guide.

Recommended based on:

• Interest rate
• Flexibility
• App usability
• Transfer process

---

How to Choose the Best Cash ISA

Look for:

• Top interest rate
• Flexible withdrawals
• Easy transfers
• FSCS protection
• Mobile banking convenience

Fixed ISAs typically offer higher rates; flexible ISAs offer better access.

---

How to Maximise Your £20,000 Allowance

1. Always choose the highest rate
2. Transfer your ISA every year if needed
3. Use monthly deposits if you can’t use the full £20,000 at once
4. Keep your ISA allowance for tax-efficient savings only
5. Consider splitting into multiple ISA types

---

Final Thoughts

The 2025 Cash ISA limit remains one of the most powerful tax-free savings tools in the UK. If you want to grow your savings efficiently, using your £20,000 allowance each year gives you a massive advantage.

Ready to start? Download our free ISA cheat sheet for a simple one-page summary.