What Are the Different Types of ISA in the UK?

In the 2026-27 tax year there are four types of adult ISA: Cash, Stocks and Shares, Lifetime and Innovative Finance, plus the Junior ISA for children under 18. gov.uk says you must be 18 or over to open an ISA and that the most you can pay into ISAs in a tax year is £20,000, whether in one account or split across several (GOV.UK: Individual Savings Accounts). The types differ in what they can hold, how much risk they carry and what happens when money is taken out.

The site's rules data was last checked against gov.uk on 26 September 2026. Figures typed in this guide may not yet reflect a later change, and the descriptions of gov.uk pages are summaries that may also lag. The current figures are on the ISA rules at a glance page. General information only, not financial advice.

Is money in an ISA taxed?

gov.uk says you do not pay tax on interest on cash in an ISA, or on income or capital gains from investments in an ISA, and that you do not need to declare any ISA interest, income or capital gains on a tax return. The amount you can pay in each tax year is limited, as covered below.

What is a Cash ISA?

The simplest type. You deposit money and earn tax-free interest, much like a normal savings account. gov.uk says cash ISAs can include savings in bank and building society accounts and some National Savings and Investments products.

Low risk, subject to the provider's terms and any FSCS cover. FSCS deposit protection is up to £120,000 per eligible person, per bank, building society or credit union. The FSCS pages read for this guide do not name ISAs, so ask your provider or FSCS whether a given ISA is covered.
Interest can be fixed or variable, so returns can change.
Often used for short-term savings and emergency funds (an illustration, not a rule).
Some accounts offer instant access; others hold the money for a fixed term, sometimes at a different rate.
Withdrawals: gov.uk says you can take money out at any time without losing the tax benefit, subject to the account's own terms (fixed-rate accounts usually charge for early access). If the ISA is flexible you can put the cash back in the same tax year without using more allowance (GOV.UK: withdrawing your money).

The Cash ISA Calculator models savings at an assumed rate.

What is a Stocks and Shares ISA?

It invests money in the stock market, such as shares, funds, bonds or ETFs, rather than paying interest.

It can hold shares in companies, unit trusts and investment funds, corporate and government bonds and long-term asset funds (GOV.UK: how ISAs work).
It has historically had higher long-term growth potential than cash, which is not guaranteed.
The value can go up or down, with no guaranteed return and no FSCS protection against market losses.
Often considered for money that can stay invested for five years or more (an illustration, not a rule).
The holder can choose their own investments or use a managed or ready-made portfolio.
Withdrawals: investments are sold first and then the cash is withdrawn. gov.uk's tax rule is the same as for other ISAs, and in a non-flexible ISA the allowance used is not given back.

The Stocks and Shares ISA Calculator estimates growth at assumed returns.

What is a Lifetime ISA (LISA)?

A Lifetime ISA is for UK residents aged 18 to 39 when they open it. You can pay in up to £4,000 a year, and the government adds a 25% bonus (GOV.UK: Lifetime ISA).

Open from 18 and before you turn 40; you can keep paying in until you are 50.
25% government bonus on what you pay in, up to the £4,000 limit.
Can be held as cash, stocks and shares, or a combination.
Money can be used towards a first home costing £450,000 or less, at least 12 months after your first payment, or withdrawn from age 60 (GOV.UK: withdrawing from a Lifetime ISA).
Withdrawing for any other reason before 60 (terminal illness excepted) triggers a 25% government withdrawal charge.

The Lifetime ISA Calculator shows how the bonus adds up.

What is an Innovative Finance ISA (IFISA)?

It holds peer-to-peer loans and some other alternative investments within a tax-free wrapper.

It can hold peer-to-peer loans, crowdfunding debentures, some funds whose notice periods keep them out of a Stocks and Shares ISA, and cryptoasset exchange traded notes (GOV.UK: how ISAs work).
It has the potential for higher interest rates than a Cash ISA.
It carries higher risk: the FSCS text read did not name ISAs (ask the provider or FSCS whether any cover applies), borrowers can default, and capital is not guaranteed.
Withdrawals depend on the platform: loans may need to be repaid or sold on a secondary market, which is not always possible, so money may not be available quickly.
It is a more specialist option, and some people consider it only if they are comfortable with the risk (an illustration, not a rule).

What is a Junior ISA?

A tax-free savings or investment account for children under 18 who live in the UK. Parents or guardians with parental responsibility open and manage it, but the money belongs to the child. A child can have one cash Junior ISA and one stocks and shares Junior ISA, with up to £9,000 a year paid in across both. The child can take control of the account at 16 but cannot withdraw until 18 (GOV.UK: Junior ISAs). The Junior ISA calculator estimates what a child's account could be worth at assumed rates.

How much can be paid into ISAs each year?

Each tax year there is a total ISA allowance that can be split across the different ISA types. The ISA Allowance Checker shows how much would need to be paid in monthly to use it fully, and the ISA Contribution Split Planner compares how to divide it between Cash and Stocks and Shares.

Regulations made on 10 September 2026 (SI 2026/1018, regulation 6, read on legislation.gov.uk on 6 October 2026) set a separate yearly limit on how much savers who are under 65 at the end of the tax year can pay into cash ISAs, lower than the overall allowance, to apply from April 2027; older savers are not affected (GOV.UK: cash ISA limit reduction). The change is made in law and is not yet in force. The guide to how much you can put in an ISA each year sets out every limit.

How are the ISA types usually described?

These are illustrations of how the types are often described, not recommendations. Which type is relevant to a person depends on their own circumstances.

Cash ISA: often described in terms of easy access or saving for something in the next few years.
Stocks and Shares ISA: often described in terms of investing for five years or more, with market ups and downs.
Lifetime ISA: designed for a first home or retirement, for those aged 18 to 39.
Innovative Finance ISA: carries higher risk, with the potential for higher interest.
Junior ISA: for saving on behalf of a child under 18.

A person is not limited to one. Some savers hold a mix, for example a Cash ISA for an emergency fund and a Stocks and Shares ISA for long-term growth. The ISA Calculator models a single ISA, and the Advanced ISA Planner compares strategies side by side.

Frequently asked questions

How many types of ISA are there?

There are four types of adult ISA: Cash ISA, Stocks and Shares ISA, Lifetime ISA and Innovative Finance ISA. Children under 18 can also have a Junior ISA.

Can I have more than one type of ISA?

Yes: you can pay into several ISA types in the same tax year and, since 6 April 2024, into more than one ISA of the same type, as long as your combined payments stay within the £20,000 allowance. The exception is the Lifetime ISA, which you can only pay into one of a year; see how many ISAs can I have for the rules by type.

What is the difference between an ISA and a Junior ISA?

An adult ISA is for anyone 18 or over, with its own £20,000 annual allowance. A Junior ISA is for under-18s, has its own £9,000 limit, and is managed by a parent or guardian until the child turns 18.

What can an Innovative Finance ISA hold?

It can hold peer-to-peer loans, crowdfunding debentures, some funds whose notice periods keep them out of a Stocks and Shares ISA, and cryptoasset exchange traded notes. It carries higher risk, and withdrawals depend on the platform.

This guide does not constitute financial advice. Your personal situation, tax position, and savings goals may mean different strategies are appropriate. Consider speaking to a regulated financial adviser if you are uncertain.