ISA Glossary
ISA terms in plain English, each written from gov.uk with a link to where it comes from.
General information only, not financial advice.
This page explains common ISA words using only what gov.uk, HMRC and the FSCS publish. Where the pages read do not define a term, this page says so instead of guessing. The site's rules data was last checked against gov.uk on 26 September 2026; that date does not apply to every statement here. Figures are read from the rules data and can change, and where this page says what gov.uk says, that is a summary that may lag. The current figures are on the ISA rules at a glance page.
A
Annual ISA allowance
The most you can save in ISAs in a tax year: £20,000 for 2026-27. gov.uk says you can put it all in one account or split it across several.
C
Capital Gains Tax allowance
The amount of gain you can make before Capital Gains Tax is due: £3,000 for 2026-27. gov.uk calls it the Capital Gains tax-free allowance. Gov.uk says you do not pay tax on capital gains from investments in an ISA.
Child Trust Fund
A long-term tax-free savings account for children born between 1 September 2002 and 2 January 2011. The scheme closed in 2011. gov.uk says you cannot have a Child Trust Fund as well as a Junior ISA, and that if you open a Junior ISA you ask the provider to transfer the trust fund into it.
Source: GOV.UK: Child Trust Funds
D
Dividend allowance
The amount of dividend income you can receive each year before dividend tax is due: £500. Gov.uk says you do not pay tax on income from investments in an ISA.
Source: GOV.UK: Tax on dividends
F
Flexible ISA
An ISA that lets you take out cash and put it back in during the same tax year without reducing your current year's allowance. gov.uk says this applies if your ISA is flexible; whether yours is depends on your provider.
Source: GOV.UK: withdrawing your money
FSCS
The Financial Services Compensation Scheme. The FSCS says it was set up by the government, is independent, and protects savings and current accounts up to £120,000. The FSCS pages read for this glossary do not name ISAs, so ask your provider or the FSCS whether a particular ISA is covered.
Source: FSCS
H
Help to Buy ISA
gov.uk says you can no longer open one. For existing holders, gov.uk says the government tops up savings when they buy their first home; the top-up rate and maximum are on the gov.uk page.
Source: GOV.UK: Help to Buy ISA
HMRC
HM Revenue and Customs, the UK's tax, payments and customs authority.
Source: GOV.UK: HM Revenue & Customs
I
ISA (Individual Savings Account)
An account in which you can save tax-free, with a yearly limit on how much you can save across all your ISAs. gov.uk lists four types: cash ISA, stocks and shares ISA, innovative finance ISA and Lifetime ISA. The gov.uk pages read for this glossary name the first three but do not define them, so this page does not either.
Source: GOV.UK: how ISAs work
ISA transfer
Moving all or part of the savings in your ISA from one provider to another. gov.uk says you can do this at any time, that you contact the provider you want to move to and complete a transfer form, and that if you withdraw the money without doing this you will not be able to reinvest that part of your tax-free allowance again. Gov.uk says transfers should take no longer than 15 working days between cash ISAs and 30 calendar days for other types of transfer, and mentions restrictions on transfers for Lifetime and Junior ISAs.
Source: GOV.UK: transferring your ISA
J
Junior ISA
A long-term, tax-free savings account for children. The yearly limit is £9,000 for 2026-27. The money belongs to the child, who can take control of the account at 16 but cannot withdraw the money until they turn 18. gov.uk says a child can have one or both types of Junior ISA.
Source: GOV.UK: Junior ISAs
L
Lifetime ISA
An ISA you can use to buy your first home or save for later life. You can pay in up to £4,000 each year until you are 50, and you must make your first payment before you are 40.
Source: GOV.UK: Lifetime ISA
Lifetime ISA first-home purchase
One of the ways to use a Lifetime ISA without the withdrawal charge. gov.uk says you use a conveyancer or solicitor to act for you in the purchase and the ISA provider pays the funds directly to them. Gov.uk also says the property must cost £450,000 or less, that you buy at least 12 months after your first payment, and that you are buying with a mortgage.
Lifetime ISA government bonus
The government adds a 25% bonus to what you save in a Lifetime ISA, up to a maximum of £1,000 a year.
Source: GOV.UK: Lifetime ISA
Lifetime ISA withdrawal charge
A 25% charge that applies if you withdraw cash or assets from a Lifetime ISA for a reason other than those gov.uk lists as charge-free. gov.uk says it applies to the total amount in the ISA, including the government bonus, when the whole pot is withdrawn.
P
Personal Allowance
The amount of income you do not have to pay tax on. The standard Personal Allowance is £12,570.
Personal Savings Allowance
The amount of savings interest you can earn without paying tax outside an ISA, which depends on your Income Tax band: £1,000 for basic-rate taxpayers, £500 for higher-rate taxpayers and £0 for additional-rate taxpayers. Gov.uk says you do not pay tax on interest on cash in an ISA.
Source: GOV.UK: how much of your savings interest is tax-free
S
Starting rate for savings
Up to £5,000 of savings interest that gov.uk says you may not have to pay tax on if your other taxable income (not counting savings interest or dividends) is low enough. The page read does not fully set out how the amount reduces as other income rises, so check it on gov.uk.
Source: GOV.UK: how much of your savings interest is tax-free
T
Tax year
The period the ISA allowance is counted over. gov.uk says the tax year runs from 6 April to 5 April.
Source: GOV.UK: how ISAs work
W
Withdrawal
Taking money out of an ISA. gov.uk says you can take your money out of an ISA at any time without losing any tax benefits. A Lifetime ISA has its own withdrawal charge, and whether money taken out can be paid back in the same year depends on whether the ISA is flexible.
Source: GOV.UK: withdrawing your money
Terms this page does not define
The gov.uk pages read for this glossary do not define the following, so this page does not either:
- ISA manager (the pages read use "ISA provider" without defining either)
- subscription (gov.uk says "save" or "pay in")
- registered contact for a Junior ISA (the pages read use the phrase without defining it; they say a parent or guardian with parental responsibility can open and manage the account)
- additional permitted subscription and continuing account of a deceased holder (the gov.uk page on what happens to an ISA when the holder dies does not mention them)
- AER (annual equivalent rate) and nominal versus real returns
More detail is in the site's guides: flexible ISAs, transferring a Lifetime, Junior or Stocks and Shares ISA, the Lifetime ISA withdrawal charge and the frequently asked questions.