What are my tax-free annual allowances?

ISAs,  JISAs, LISAs and pensions all have annual allowances. This means you can contribute up to the annual allowance in a given tax year, and there may be tax benefits in doing so. Allowances and any tax benefits depend on your personal circumstances and may be subject to to change in the future.

A GIA may be subject to tax on income – such as dividends and interest – and/or capital gains, where the returns exceed the annual dividend and capital gains tax-free allowances. There’s more information on these tax allowances below. However, there are no limits on how much you can invest in a GIA each year.

Here at J.P. Morgan Personal Investing, we don’t offer cash ISAs. But if you have a cash ISA or indeed any other type of ISA with another provider, any contributions you make over the course of the tax year will still count towards your annual allowance. 

What is the annual allowance for an ISA?  

The annual allowance for ISAs is £20,000. 

This is the total amount you are allowed to  put into ISAs in the 2025/26 tax year (the allowance could change in future years). Whether you are saving with a Cash ISA, or investing in a Stocks and Shares ISA, a LISA, or an Innovative Finance ISA, the combined maximum contribution is £20,000 for that tax year. Cash ISAs and Innovative Finance ISAs are not available at J.P. Morgan Personal Investing. You can open and pay into each type of ISA during the tax year, but your total ISA contributions must not exceed £20,000.

What is the annual allowance for a Lifetime ISA?  

The annual allowance for LISAs is £4,000 (as part of your £20,000 ISA allowance). 

This is the total amount you are allowed to put into a LISA for the 2025/26 tax year, and you can only have one LISA per tax year. The government will add a further 25% to anything you add within the tax year. If you maximised your LISA allowance by adding the full £4,000, the government would then add a further £1,000 (25%) to bring it up to a total of £5,000. 

Note, you can only open a LISA if you’re aged 18-39, and and you can continue to pay into it until you're 50. You can use it for two purposes: working towards your first home (costing £450,000 or less) or your retirement from age 60. You can also withdraw from your LISA without charge if you’re terminally ill, and expected to die within 12 months. Withdrawals outside of these conditions can incur a 25% government withdrawal charge. 

It’s important to remember that whatever you put into a LISA counts towards your total £20,000 allowance for ISAs for the tax year. If you put £4,000 in a LISA, you will have £16,000 left to contribute to other ISA types for that tax year. 

Please note, that if you choose to opt out of your workplace pension to pay into a Lifetime ISA, you may lose the benefits of the employer-matched contributions. Your current and future entitlement to means-tested benefits may also be affected.

What is the annual allowance for a Junior ISA (JISA)?

The annual allowance for JISAs is £9,000. 

Parents or guardians can open a JISA for their child, after which up to £9,000 per tax year, per child, can then be invested into it by anyone, without tax being payable on the growth. This does not affect or contribute to your £20,000 annual ISA allowance as the money belongs to the child in whose name the JISA has been set up. Your child can only have one cash and one stocks and shares JISA at any time.

To open a J. P. Morgan Personal Investing JISA, the child must be under the age of 16. However, note that the money cannot be accessed until the child turns 18 and can only be accessed by the child.

What is the annual allowance for a pension? 

The annual allowance for pension contributions is £60,000 (maximum). 

The government gives you tax relief on your pension contributions. This relief applies up to 100% of your relevant UK earnings, or the government set annual allowance which is currently £60,000 – whichever is lower. However, this annual allowance is subject to tapering if you’re a very high earner.

Contributions to your workplace or personal pension may benefit from 20% tax relief from the government. In this example, every pound in your pension would only cost you 80p, with the other 20p coming from the basic rate of income tax you would otherwise have paid. Instead of HMRC receiving that tax, it goes straight into your pension pot.

If you are a higher-rate taxpayer, you can claim a further 20% tax relief and if you’re an additional-rate taxpayer, you can claim an extra 25% via your Self Assessment tax return. This happens automatically in workplace pensions – you don't have to claim. 

More details around tax relief can be found in our Guide to Tax Efficient Investing. 

Remember, your tax relief counts towards your total pension contributions and therefore affects your annual allowance. So, don’t forget to factor this in when you’re calculating how much to put into your pension each year. You can normally only access your pension from age 55 (57 from 2028) unless you are terminally ill.

Unlike an ISA, you can still contribute as much as you want beyond the pension allowance, but you’ll be liable to pay tax on any amount over the contribution limit. This is called an ‘annual allowance charge’, and it will be added to the rest of your taxable income for the year when your tax liability is calculated. Importantly, you may also be able to carry forward any unused pension allowance from the previous three years.  

If you live in Scotland, the tax relief rates work differently. 

If you’d like some help understanding how to use tax efficient wrappers like ISAs and pensions you can book a call with one of our experts, who’d be happy to provide you with free financial guidance. 

If you're targeting an earlier retirement, you can read our article, How much do I need to retire at 55?

What is the annual allowance for a General Investment Account (GIA)? 

There is no annual allowance, you can invest as much into a GIA as you wish.

GIAs are not designed with tax protection in mind. Any realised capital gains, or income you earn from investments in a GIA, may be subject to tax. It can be worth using up all your annual ISA allowance, and once you’ve reached your ISA limit for the tax year, a GIA can be a good way to invest beyond that.

Risk warning: As with all investing, your capital is at risk. The value of your portfolio can go down or up and you may get back less than you invest. ISA/JISA/LISA/Pension eligibility rules apply. With LISAs, govt withdrawal charges may apply. Seek financial advice if you're unsure if a pension is right for you. Tax rules vary by individual status and may change. This is general information, not personalised tax advice.