Last updated: July 2026 · Sourced from official UK government publications
Plain-English explainer. All limits drawn from HMRC and gov.uk. Not financial advice. See disclaimer below.
Yes. Money you put into a Lifetime ISA counts towards the £20,000 annual ISA allowance. The 25% government bonus does not. Below is how the allowance splits across ISA types in 2026/27, what the rules let you do, and the common mistakes that cost people the bonus.
The total amount you can pay into all ISAs in a single tax year is £20,000. The 2026/27 tax year runs from 6 April 2026 to 5 April 2027. The £20,000 figure is unchanged from 2025/26, and the government has said it stays at £20,000 until 5 April 2031. Inside that £20,000 you can mix:
The LISA cap is the only sub-limit in 2026/27. The other ISA types share the rest of the £20,000 between them. If you are new to ISAs generally, the guide to how an ISA works covers the wrapper itself, and the Lifetime ISA explained covers who can open a LISA in the first place.
Every £1 paid into a LISA reduces your remaining ISA allowance by £1. Pay the full £4,000 LISA cap and you have £16,000 left for the other ISA types. The 25% government bonus is added on top by HMRC and is not counted, so the total cash ending up in the wrapper can be £25,000 in a year (£16,000 in other ISAs + £4,000 personal LISA + £1,000 LISA bonus).
| Allowance | 2026/27 limit |
|---|---|
| Overall ISA allowance | £20,000 |
| Lifetime ISA (sub-cap, included in £20,000) | £4,000 |
| Junior ISA (separate, for under-18s) | £9,000 |
| LISA government bonus (paid on top) | £1,000 max |
None of these numbers changed on 6 April 2026. The bonus itself lands separately, usually a few weeks after each contribution, as set out in when the government pays your LISA bonus.
Yes. The LISA and the Stocks & Shares ISA are different ISA categories. You can pay into both in the same tax year. The combined contributions cannot exceed £20,000.
From April 2024, the rules also allow you to pay into multiple ISAs of the same type within the same tax year. So you could open two stocks and shares ISAs alongside a LISA and a cash ISA, provided the total stays at or below £20,000. Not every provider supports the new flexibility yet, so check before splitting.
A common arrangement for first-time buyer savers is £4,000 LISA + £16,000 cash ISA. The LISA captures the maximum £1,000 bonus and is held in cash to protect against short-term market falls. The remaining £16,000 sits in a cash ISA where it earns interest tax-free.
For longer-term savers (10+ years), some choose to hold the LISA inside a Stocks & Shares LISA wrapper for higher potential growth. Others prefer the certainty of cash. The right choice depends on time horizon and risk appetite, both of which are personal. What a stocks and shares wrapper actually does with your money is covered in how a stocks and shares ISA works, and the tax side in whether you pay CGT on shares in an ISA.
Realistically, most people in their late teens and twenties are nowhere near the £20,000 ceiling, so the split question is academic and the £4,000 LISA cap is the only limit that bites. Where it does matter is the year you buy: if a lump sum from family lands in March, the £4,000 LISA cap still applies to it, and the rest has to go somewhere else.
Before April 2024, you could only open one ISA per type per tax year. The 2024 reform removed that for cash, stocks & shares, and innovative finance ISAs, but kept it for the Lifetime ISA. So:
Transfers between providers do not count as new contributions, so transferring a LISA to a different provider in the same tax year does not breach the one-LISA rule.
This does not affect the 2026/27 tax year, but it is coming and it is worth knowing about now. From 6 April 2027 the amount you can pay into a cash ISA drops to £12,000 a year if you are under 65. The overall ISA allowance stays at £20,000, and savers aged 65 and over keep the full £20,000 cash ISA limit from the tax year they turn 65.
The Lifetime ISA cap is untouched by this: it stays at £4,000 a year. What changes is how much of the remaining allowance can sit in cash rather than in investments. A few related rules start on the same date: a flat-rate 22% charge on interest paid on cash held inside stocks and shares or Innovative Finance ISAs, a ban on transferring from a non-cash ISA into a cash ISA (cash into non-cash is still allowed, and the over-65s are exempt from the transfer restriction), and wholly cash-like portfolios becoming ineligible, with only money market funds allowed as partial cash-like holdings. The legislation is due to be laid in Autumn 2026.
Separately, the government is consulting on a First Time Buyer ISA to be offered in place of the Lifetime ISA. That consultation closes at 11:59pm on 18 August 2026 and nothing has been legislated, so the LISA rules described on this page are the ones in force.
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Subscribe free →Yes. Pay £4,000 to a LISA and you have £16,000 left for other ISAs. The 25% bonus is on top and does not count.
Yes. They are separate ISA categories. Your combined contributions cannot exceed £20,000 in a tax year.
Both allowed. Combined contributions count towards £20,000. The £4,000 LISA sub-cap is inside that figure.
Provider-to-provider transfers do not count as new contributions. Transfers out of a LISA before age 60 (other than for a first home) trigger the 25% withdrawal charge, which is set out in full in the LISA withdrawal rules.