ISA allowance deadline 2026: Use it or lose it before LISA and Cash ISA changes hit

The tax year ends on 5 April, which means time is running out if you want to use your 2025/26 ISA allowance. The ISA allowance is £20,000 this year, and it refreshes every 6 April. Once the deadline passes, you lose any unused allowance, you can’t carry it over to the next year.  

For a lot of people, the £20,000 is plenty and they’re unlikely to get anywhere near that figure this year or next. But, if you’re in a position to use up the full allowance, topping up now is one of the simplest ways to keep more of your savings and investments tax‑free. 

Bear in mind, there are also changes happening in the next couple of years to the way Lifetime ISAs and Cash ISAs are going to work. So, it’s worth making some strategic choices about how you use up your ISA allowance.  

Why this year is especially important for Lifetime ISAs (LISAs) 

The Government has confirmed that the Lifetime ISA will be replaced by a new first‑time buyer ISA from April 2028. The replacement will focus only on helping people buy a first home. The LISA’s retirement‑saving option is expected to be removed. However, if you're a first‑time buyer aged 18–40, opening a LISA now is still worth it, even if you only put in £1 today. Here’s why.  

1. You lock in access to the LISA before it closes to new customers 

Once it’s scrapped, new LISAs won’t be available, but existing ones are expected to stay open under the same rules. Opening one now keeps your options open. 

2. You need to have had a LISA open for 12 months to use it to buy a home 

Putting in even a tiny amount means the countdown starts. If you end up buying next year, you’ll be able to use the LISA bonus. But you can’t use it to buy a house if you’ve not had it open for at least a year.  

3. You can still earn the 25% government bonus 

Right now, you can save up to £4,000 a year, and the government adds 25% (up to £1,000). That’s free money towards your home (or retirement).  

With the 2028 product likely to pay the bonus only at the point you buy your home, not monthly, locking into the current system may be more rewarding. This is because you’ll earn interest on both your own contributions as well as the government bonus throughout the entire period of having your LISA open.  

Cash ISAs: Limit changes and how to boost your cash savings  

If you prefer the safety of cash savings, you’ll probably be aware that from April 6, 2027, the amount you can put into a Cash ISA each year will fall from £20,000 to £12,000 if you’re under 65. The overall ISA allowance will still be £20,000, but anything above £12,000 will need to go into a Stocks & Shares ISA or another non‑cash ISA if you want it to stay tax‑free.  

This means right now you can still save up to £20,000 into a Cash ISA until 5 April 2026, and again for the 2026/27 tax year. But, from April 2027, for people aged 65 and under, the Cash ISA limit drops to £12,000 while the 65+ Cash ISA limit will remain the same.  

Anything you pay into your Cash ISA before April 2027 stays protected under the older, higher limit. Future cuts won’t affect your existing balance as long as you leave it within the ISA environment. So, it's a good idea to think about using some of your allowance to boost your Cash ISA if cash savings are important to you and you’re likely to hit the new limit.  

Why acting now helps protect your future savings 

• The LISA is changing and opening one before it disappears gives first‑time buyers more flexibility and keeps access to the current, more generous bonus system. 

• The Cash ISA limit is being cut, so using your allowance now means more of your long‑term savings stay tax‑free. 

• Once money is inside an ISA, it stays protected, even if future rules change and you can still move it between ISA providers or switch types within the rules.  

If you’re thinking about saving, buying a home, or just want to protect more of your money from tax, now is a good time to think about topping up your ISA, or open one for the first time.