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The total ISA allowance for the 2025/26 tax year is £20,000. This can be split across:

• Cash ISA
• Stocks & Shares ISA
• Innovative Finance ISA
• Lifetime ISA (subject to a £4,000 sub-limit, included in the overall £20,000)

All interest, dividends and capital gains within an ISA are tax-free. The Junior ISA allowance is £9,000 per child per year. The £20,000 total allowance is frozen until 2030. From 6 April 2027 (the 2027/28 tax year), the cash ISA cap reduces to £12,000 for under-65s — those aged 65 and over keep the full £20,000 cash ISA limit (Autumn Budget 2025).

The Financial Services Compensation Scheme (FSCS) protects eligible cash deposits up to £120,000 per person, per authorised institution, in the event the institution fails. Joint accounts are protected up to £240,000. The deposit limit was raised from £85,000 to £120,000 on 1 December 2025 by the Prudential Regulation Authority, the first increase since 2017.

Note that the investment protection limit remains at £85,000 — this applies to Stocks & Shares ISAs, fund platforms and other FCA-regulated investment firms. The £120,000 limit only applies to cash deposits at banks, building societies and credit unions.

The protection applies separately to each authorised institution — splitting larger savings across multiple banks (under different banking licences) can increase total protection. Some banks share a single FSCS licence, so it's worth checking the FSCS protection checker before depositing.

The Personal Savings Allowance lets most UK taxpayers earn some interest tax-free outside of an ISA:

• Basic-rate taxpayers (20%): £1,000 interest tax-free
• Higher-rate taxpayers (40%): £500 interest tax-free
• Additional-rate taxpayers (45%): £0 — no PSA

Interest above the PSA is taxed at the marginal income tax rate. ISA interest does not count toward the PSA — ISAs are entirely tax-free.

Exceeding the £20,000 ISA allowance in a single tax year creates a "non-qualifying" amount. HMRC may contact the ISA provider to remove the excess and any associated growth, with the excess returned to the account holder.

HMRC matches ISA reporting from providers each year, so excess subscriptions are typically detected automatically. Tax may be due on income or gains from the excess amount before it was removed.

The standard pension annual allowance is £60,000 for 2025/26 — the maximum amount that can be paid into pensions each tax year while still receiving tax relief.

For high earners, the tapered annual allowance reduces the limit by £1 for every £2 of "adjusted income" above £260,000, down to a minimum of £10,000. Anyone who has flexibly accessed a defined contribution pension is subject to the Money Purchase Annual Allowance (MPAA) of £10,000.

Personal pension contributions receive tax relief at the marginal income tax rate:

• Basic-rate taxpayers (20%): An £80 contribution becomes £100 in the pension
• Higher-rate taxpayers (40%): Effective net cost of £60 for £100 in the pension
• Additional-rate taxpayers (45%): Effective net cost of £55 for £100 in the pension

Basic-rate relief is added automatically by the pension provider. Higher and additional-rate taxpayers claim the additional relief through Self-Assessment. Within a workplace pension, contributions may be made via salary sacrifice or net pay arrangements.

The Normal Minimum Pension Age (NMPA) is currently 55, rising to 57 from 6 April 2028 for most savers. Earlier access may apply only in cases of serious ill-health or specific protected pension ages.

From the NMPA onwards, up to 25% of the pension can typically be taken tax-free (subject to the lump sum allowance of £268,275 for most savers). The remainder is taxed as income when withdrawn. Once a defined contribution pension is flexibly accessed, the MPAA of £10,000 applies to future contributions.

A Self-Invested Personal Pension (SIPP) is a personal pension that gives the holder full control over investments — shares, ETFs, funds, gilts and (for some SIPPs) commercial property. Workplace pensions typically offer a small range of provider-selected default funds.

Both receive tax relief on contributions, both grow tax-free, and both are subject to the same £60,000 annual allowance and lump sum allowance rules. SIPPs typically charge platform and dealing fees that workplace pensions may not.

Yes. Interest from a joint account is treated as split equally between account holders for tax purposes, unless evidence shows a different ownership split.

Each holder reports their share on their Self-Assessment return (if required), counting it against their own Personal Savings Allowance and starting rate for savings. Banks report interest paid to HMRC, which is used to update tax codes for PAYE taxpayers.

Low-income earners may pay 0% tax on up to £5,000 of savings interest — the "starting rate for savings". The £5,000 reduces by £1 for every £1 of non-savings income (employment, pension, rental) above the personal allowance.

For most basic-rate earners, the starting rate is fully tapered away by the time non-savings income exceeds £17,570 (Personal Allowance £12,570 + £5,000). After this point, only the Personal Savings Allowance applies.

All growth within a Stocks & Shares ISA is completely tax-free:

• No Capital Gains Tax on share or fund gains
• No Dividend Tax on UK or overseas dividends
• No Income Tax on bond coupons

There is no need to report ISA gains or income on a Self-Assessment return. The £20,000 annual ISA allowance applies across all ISA types combined.

The CGT annual exempt amount (AEA) is £3,000 for individuals from the 2024/25 tax year onwards (reduced from £6,000 in 2023/24 and £12,300 in 2022/23).

Gains above the AEA are taxed at 18% (basic-rate band) or 24% (higher/additional-rate band) on most assets from 30 October 2024 onwards. Residential property attracts the same rates after the rate alignment in October 2024. Gains within an ISA or pension are entirely outside CGT.

Inflation reduces the real value of money over time. The Bank of England targets 2% inflation. If a savings account earns 3% nominal and inflation is 4%, real return is approximately -1% — meaning purchasing power has fallen even though the pound balance has grown.

Over 20 years at 3% average inflation, £100 today has the equivalent purchasing power of around £55. Investments that have historically outpaced inflation include diversified equities, certain types of property, and inflation-linked bonds — though all carry investment risk.