What happens to your unused ISA allowance?

ISA allowance works by tax year

The ISA allowance applies separately to each UK tax year, which runs from 6 April to 5 April.

If you do not use all of your allowance by 5 April, the unused part does not normally roll into the next tax year.

A simple example

Suppose the annual ISA allowance is £20,000 and you subscribe £12,000 during the tax year.

You have £8,000 of allowance remaining until 5 April. If you do not use it by then, you cannot add that £8,000 to the following year's allowance.

On 6 April, a new tax year begins and the allowance resets to the amount set for that year.

Existing ISA money is different

Money already held inside an ISA can generally remain there from one tax year to the next. The annual allowance limits new subscriptions, not the total amount you are allowed to have accumulated across ISAs over many years.

Transfers between ISA providers should normally be carried out through the formal ISA transfer process rather than by withdrawing and reinvesting the money yourself.

Flexible ISAs are a separate rule

A Flexible ISA can allow certain withdrawals to be replaced within the same tax year without using additional allowance. That does not mean unused annual allowance can be carried into a later tax year.

Tax rules can change, so check current HMRC guidance for the tax year concerned.