UK ISA Calculator 2026/27
Calculate your tax-free ISA growth, compare Cash vs Stocks & Shares ISAs, and see how ISAs can boost your savings.
Your ISA Details
ISA Benefits Breakdown
ISA vs Taxable Investment
In a taxable investment, you would pay tax on interest/dividends and capital gains. This ISA would save you approximately £6,339.258 in tax over 10 years compared to a taxable investment with the same growth.
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Learn more about UK ISAs and tax-efficient investing.
Understanding UK ISAs
What Is an ISA and Why Should You Use One?
An Individual Savings Account (ISA) is a tax-efficient way to save or invest in the UK. The key advantage is simple: any returns you make inside an ISA are entirely tax-free. No capital gains tax, no dividend tax, no income tax on interest. The government essentially gives you a allowance each year to grow your money without sharing the returns.
For 2026/27, the annual ISA allowance is £20,000. This is a "use it or lose it" allowance — you can't carry it forward to future years. If you don't contribute by 5 April 2027, that year's allowance disappears. This makes ISAs a priority for anyone serious about tax-efficient saving.
There are two main types: Cash ISAs, where your money earns interest tax-free, and Stocks & Shares ISAs, where your money is invested in the stock market and grows through capital gains and dividends, also tax-free. Most people should at least consider a Stocks & Shares ISA, especially for medium to long-term goals, because the historical returns substantially outpace cash ISAs.
Cash ISA vs Stocks & Shares ISA: Which Is Right for You?
The choice between a Cash ISA and a Stocks & Shares ISA depends primarily on your time horizon and risk tolerance. Cash ISAs are essentially savings accounts with a tax wrapper. They offer lower returns (currently 4-5%) but your capital is protected and accessible without risk of loss. They're ideal for emergency funds, short-term savings goals, or anyone uncomfortable with investment risk.
Stocks & Shares ISAs invest your money in the stock market, typically through index funds tracking the FTSE 100, S&P 500, or global markets. Historically, the UK stock market has returned around 7% annually over long periods. Over 20 or 30 years, that difference compounds dramatically. £20,000 invested in a Cash ISA at 4.5% for 20 years becomes roughly £48,000. The same in a Stocks & Shares ISA at 7% becomes roughly £77,000.
For retirement savings with 10+ years to grow, a Stocks & Shares ISA is usually the better choice. The longer your time horizon, the more time your money has to ride out market fluctuations. Even a modest 5-year time horizon can work well in a Stocks & Shares ISA, provided you can tolerate seeing your balance dip occasionally.
How ISAs Save You Money on Tax
The tax savings from ISAs compound over time in ways that aren't always obvious. Consider a higher-rate taxpayer investing £20,000 per year in a Stocks & Shares ISA versus a taxable investment account. In the taxable account, they'd pay 40% tax on dividends and potentially 20% capital gains tax when selling. Over 20 years, this could cost them tens of thousands of pounds in taxes.
The ISA eliminates all of this. Your returns are yours to keep, completely tax-free. For basic-rate taxpayers, the advantage is smaller but still meaningful. For higher and additional-rate taxpayers, the ISA advantage is substantial and makes it one of the most powerful tax-planning tools available to UK investors.
The calculator shows you the equivalent taxable return to illustrate what you'd lose to tax if you weren't using an ISA. For a higher-rate taxpayer with a £50,000 portfolio growing to £100,000 over 10 years, that could represent £20,000 or more in tax saved. This is why maxing out your ISA allowance before contributing to taxable investment accounts is generally the right priority.
ISA Allowances and How to Use Them
The annual ISA allowance for 2026/27 is £20,000 per person. This is a per-person limit, not per account, so a married couple could shelter £40,000 per year between them. The allowance resets each tax year, so contributing early in the tax year gives your money more time to grow tax-free.
You can split your allowance across different ISA types — for example, £10,000 in a Cash ISA and £10,000 in a Stocks & Shares ISA. There's also the Lifetime ISA (LISA), which offers a 25% government bonus on contributions up to £4,000 per year, intended for first-home purchases or retirement. For anyone saving for a first home or retirement, the LISA deserves serious consideration.
The key rule: you can only contribute to one of each ISA type per tax year. So one Cash ISA, one Stocks & Shares ISA, and one Lifetime ISA per year. If you've already opened and contributed to a Stocks & Shares ISA this tax year, you can't open another one until 6 April. Plan accordingly to avoid wasting your allowance.