You can save up to £20,000 each tax year into a Cash ISA. If you have other ISA accounts, like a Lifetime ISA or Stocks and Shares ISA, this £20,000 limit applies across all your accounts - including those you hold with different providers. So if you have saved £4,000 into your Lifetime ISA and £2,000 into a Stocks and Shares ISA this tax year already, that means you can only save up to £14,000 into any Cash ISA.
The tax year in the UK runs from April 6th to April 5th of the following year.
Additionally, any interest earned within ISAs does not count toward the allowance and remains tax-free.
You can easily see how much of this year’s allowances you’ve used up on the home screen in the Tembo app under the “My Allowances” section. You’ll see your Lifetime ISA in green, and your Cash ISA in blue. Be aware, this doesn’t record what you have saved in other ISA accounts held with different providers.
It’s important to note that only HMRC holds complete records of your contributions across all ISAs from different providers, as individual providers can only track contributions to the accounts they manage.
🚨 If you withdraw funds from your Lifetime ISA or Cash ISA, and deposit those funds into a different ISA account, this could mean your money is counted twice towards your £20,000 ISA allowance for the tax year. This is because these accounts are not “flexible” ISAs, meaning you can’t withdraw and deposit the same funds within the same tax year without impacting your ISA allowance.
If you accidentally exceed the £20,000 allowance, contributions that go over the limit will not qualify for tax advantages. There is also a risk of intervention from HMRC, who will notify you with instructions for correcting the excess (e.g., withdrawal of excess funds).
Additional Considerations for Over-Contributions
If you over-contribute to a Tembo Cash ISA, Tembo will automatically refund the excess amount in order to comply with HMRC regulations and safeguard the account holder. To prevent exceeding the annual allowance, users should maintain detailed records tracking all contributions across all providers.
Tax treatment depends on individual circumstances and may be subject to change in the future. Must be 18-39 to open a LISA. Ineligible withdrawals may return less than paid in. Past performance is not a reliable indicator of future results, capital at risk.