Insights

Make the most of your ISA this year

The new tax year is underway, but there's still time to make the most of your £20,000 tax-free ISA allowance. With changes to ISA rules on the way in 2027, this is a good year to make your allowance work for you.

What is an ISA?

An ISA is an Individual Savings Account, which lets you save money without paying tax on any returns you get on your savings. You can save up to £20,000 each tax year and the allowance resets every year on 6 April. Anything you don't use by 5 April is gone for good. It doesn't roll over.

There are different types of ISAs: Cash ISAs, Stocks and Shares ISAs, Lifetime ISAs and more. The right one depends on what you're saving for and how much risk you are willing to take.

What's changing in 2027?

From April 2027, the rules around ISAs are set to change. The details are still being confirmed, but what is clear is that the government wants to encourage more people to invest in stocks and shares rather than hold cash savings.

This means that if you prefer the simplicity and security of a Cash ISA, using your allowance now will allow you to lock in the current Cash ISA allowance before it changes.

We'll keep you updated as more detail becomes available.

What is a Shariah-compliant Cash ISA?

A standard Cash ISA pays interest. This isn’t suitable for savers who follow Islamic finance principles due to interest (riba) not being permitted.

A Shariah-compliant Cash ISA works differently. Instead of interest, you receive an expected profit rate (EPR) – a return that's generated through ethical, Shariah-compliant means and independently certified to meet Islamic finance standards.

In practice, it works in a similar way. You save, your money grows and you don't pay tax on that growth. The key difference is that this growth is generated transparently and without interest.

Shariah-compliant Cash ISAs have the same £20,000 annual allowance and the same tax-free benefit. They are just a way of saving that fits your values.

Is a Shariah-compliant Cash ISA right for me?

A Shariah-compliant Cash ISA is worth considering if:

  • You want a safe, straightforward place to save
  • You don't want to take on investment risk
  • You want your savings to be tax-efficient
  • You want your money to be managed in a Shariah-compliant way

If you're saving for the long term and comfortable with some risk, a Stocks and Shares ISA might offer stronger growth potential and it’s often worth speaking to an independent financial adviser for personalised advice. However, for reliable, accessible, ethical saving, a Cash ISA is hard to beat.

Don't let your allowance go to waste

£20,000. Tax-free. Shariah-compliant. If you've been meaning to look into it, now is the time. Got questions? We're happy to help, just get in touch.

This article is for information purposes only and does not constitute financial advice. An independent financial adviser can help you decide what’s right for you. Your eligible deposits are protected up to £120,000 by the FSCS. ISA eligibility criteria applies.