ISA Calculator 2025/26 — Tax-Free Savings & Investment Returns
ISA allowances 2025/26
ISA vs non-ISA returns compared
Compound interest at 4.5%. Non-ISA assumes basic rate taxpayer (20% tax on interest above £1,000 PSA each year).
| Savings | Years | ISA Return | Non-ISA Return | Tax Saved |
|---|---|---|---|---|
| £10,000 | 1 | £450 | £450 | £0 |
| £10,000 | 3 | £1,412 | £1,412 | £0 |
| £10,000 | 5 | £2,462 | £2,462 | £0 |
| £20,000 | 1 | £900 | £900 | £0 |
| £20,000 | 3 | £2,823 | £2,823 | £0 |
| £20,000 | 5 | £4,924 | £4,903 | £20 |
| £50,000 | 1 | £2,250 | £2,000 | £250 |
| £50,000 | 3 | £7,058 | £6,219 | £805 |
| £50,000 | 5 | £12,309 | £10,746 | £1,437 |
Returns are total interest earned over the period. Tax saved = total income tax avoided by using an ISA.
Should I use my ISA allowance?
Your savings interest is under the PSA
If your interest is below £1,000 (basic rate) you won't pay tax right now. But an ISA still protects you if rates rise or your savings grow — once money is in an ISA, it stays tax-free permanently, regardless of future interest rates or balance changes.
You're a higher or additional rate taxpayer
Higher rate taxpayers only get a £500 PSA and pay 40% on the excess. Additional rate taxpayers get no PSA at all. The ISA tax saving is significantly larger — maximise your £20,000 allowance.
Use it before April 5 or lose it
Your ISA allowance resets on 6 April each year and cannot be carried forward. Any unused portion of your £20,000 allowance for 2025/26 is lost after 5 April 2026. Even a partial contribution is better than none.
Lifetime ISA (LISA)
£4,000/year with a 25% government bonus — that's up to £1,000 free each year. The Lifetime ISA contribution counts toward your £20,000 annual ISA allowance.
Who can open one?
You must be aged 18–39 to open a Lifetime ISA. You can continue contributing until you turn 50.
What can I use it for?
Buying your first home (property up to £450,000) or retirement withdrawals from age 60. Any other withdrawal incurs a 25% penalty on the amount withdrawn — meaning you lose the government bonus and some of your own money.
Maximum bonus over time
Contributing £4,000 every year from age 18 to 49 gives 32 years × £1,000 bonus = £32,000 in free government money, plus investment growth on top.