A Stocks & Shares ISA (Individual Savings Account) remains one of the most popular ways to invest, allowing the holder to shelter investment returns from tax each year. The current tax year ends on 5th April so anyone considering using this year’s ISA allowance should not delay.
What is the ISA allowance for 2025/26?
This tax year (2025/26), you can add up to £20,000 to one ISA or split the money between several of the various types; the most used being Cash ISAs and Stocks & Shares ISAs. Whichever type of ISA you invest in you pay no income or capital gains tax (CGT) on the returns – no matter how much they are.
Why is the end of the tax year important? Well, you can’t carry over any unused allowance, so if you don’t use it before 5th April, it is lost forever. You get a new annual ISA allowance in the new tax year, but you could have missed the opportunity to shelter more of your savings and investments from tax.
What is the Junior ISA allowance for 2025/26?
Junior ISAs are a popular way for family and friends to build up tax-efficient savings and investments for a child. The tax benefits are the same as an adult ISA – no capital gains tax, and no further tax to pay on income. Withdrawals are possible from the age of 18 when it automatically converts to an adult ISA, meaning the pot can be useful to help with the cost of university or a deposit for a house. This tax year’s Junior ISA allowance is £9,000 per child.
Does transferring an ISA use your allowance?
No, transferring an ISA has no effect on your annual ISA allowance so long as you carry out a transfer process through the provider you are moving to.
However, if you take money out of an ISA and then put it back in that does count towards your allowance – unless you use a flexible ISA provider such as Charles Stanley Direct and the money is replaced in the account before the end of the tax year it is withdrawn in.
Why use your ISA each tax year?
- Excellent tax benefits
The tax rate you pay on capital gains over the annual CGT allowance of £3,000 is 18% or 24% depending on your tax position. This means holding shares and funds in an ISA can make a lot of sense – all your profits are tax free.
You also don’t need to pay tax on any dividends or other income you receive from investments held in ISAs. Income from investments held in a normal investment account are taxable and only a limited amount falls into the various allowances – for instance the annual dividend allowance is only £500.
Even if keeping your money outside the clutches of the tax man doesn’t seem relevant now, it might in the future. It could be worth planning ahead for when your wealth grows.
- Simplifying your life
ISA income or gains don’t need to be declared on a tax return, so they can make your affairs simpler.
- Flexibility
As well as being able to invest in a wide range of assets, our flexible Stocks & Shares ISA allows you to access your money at any time (and replace it before the end of the tax year without affecting your allowance) so it’s suitable for a variety of investing needs.
Last minute tips for using your ISA allowance for 2025/2026
1. Leave your ISA in cash for now if you can’t decide
If you're unsure where to invest, you can always secure this year's allowance with cash now and decide later. There is no charge for holding cash in our ISA. However, take care not to wait in cash too long. Interest on cash in a Stocks & Shares ISA is unlikely to significantly outpace increases in the cost of living, and for the longer term you stand to be better rewarded by investing.
2. Consider managed investments
Monitored and rebalanced by Charles Stanley experts, each of our multi asset funds offers a diversified portfolio in one easy-to-buy investment designed to meet a broad risk profile. The funds are actively managed by one of our dedicated portfolio management teams, which means you do not need to monitor and change individual funds, shares or other assets in your portfolio – it's done for you.
Our range of multi-asset funds invest in other funds as well as other assets across a variety of areas. Not having all your eggs in one basket means you are not reliant on specific investments or areas performing well and you benefit from Charles Stanley’s investment expertise and day-to-day portfolio management.
3. Get some ideas to make your own decisions
Investors who wish to select investments themselves can choose from the exceptionally broad range available: thousands of funds, UK and overseas shares, gilts, bonds, investment trusts and ETFs.
With so many possible investments selecting individual ones can be a daunting prospect. To help narrow down the field our Collectives Research Team has created the Charles Stanley Direct Preferred List, which highlights what we consider to be good-quality options within their respective areas for new investment.
It provides a comprehensive range as it covers funds and investment trusts, and it includes straightforward passive funds or trackers as well as more specialist actively managed investments.
4. Diversify
If you invest too much in one area you are reliant on its fortunes. Diversification can allow you to secure strong long-term returns but without excessive risk and reliance on one or a few areas. It’s the process of dividing your investments between different investments, as well as different asset classes, such as shares, bonds, property, cash and others.
Investors often use funds to provide wide-ranging exposure to a market or asset class. For funds investing in shares, a single active fund typically offers 50 to 80 holdings – ideal for the investor without the time or inclination to select their own. By holding several funds specialising in different areas, you can build a very diversified portfolio quickly and simply. Follow the link for more on how funds can be a great investment shortcut.
5. Consider accounts for your family
With inflation taking bites out of spending power and more tax rises ahead, it is more important than ever to ensure your finances are as tax efficient as possible.
If you are married or in a civil partnership, it’s possible to organise your affairs efficiently so that tax-free allowances are maximised. By using two ISA limits a couple can shelter up to £40,000 each year from tax. Transfers between spouses and civil partners are tax free so you can shuffle any money earmarked for investing between you and make the most of the ISA allowances.
You can also consider Junior ISAs for children or grandchildren to help them build tax efficient savings or investments of their own.
6. Pensions are also an option
Pensions are often a highly effective means of investing for retirement owing to the tax relief available on payments into them.
Currently, anyone under 75 with relevant UK earnings can receive tax relief on pension contributions when they use their annual allowance with a personal pension such as a SIPP (Self-Invested Personal Pension). HMRC adds 20% and any further higher or additional rate income tax relief can be reclaimed – a potentially simple way of reducing your income tax bill for the year.
The tax treatment of pensions depends on individual circumstances and is subject to change in future.
7. Set yourself a reminder for April 5th
You can make payments into your Charles Stanley Direct ISA online using your debit card until midnight on 5 April. This is via the "Pay Money In" link under the "Manage my money" section of the site on your My Accounts page.
Should you wish to add funds to your ISA (or SIPP) with us in the 2025/2026 tax year, the following deadlines apply:
Debit card payments
You can make payments online using your debit card until midnight on 5 April via the ‘Pay Money In’ link when you are signed into your account. This can be found under the ‘Manage my money’ option on your Dashboard page, under the ‘My Accounts’ tab.
We recommend you don’t leave subscriptions until the last minute in case you encounter a problem making a payment, and we cannot accept payments from anyone other than the account holder.
Electronic transfers
We can also accept an electronic payment from your bank. The funds need to arrive with us by midnight on Wednesday, 1 April. Please ensure that you quote your Charles Stanley Direct account number as reference at the time of payment.
Get in touch
If you require further assistance, get in touch with our friendly helpdesk:
- secure message from within the platform
- call 0131 550 1234 Monday - Friday 7.30am - 5pm
Nothing on this website should be construed as personal advice based on your circumstances. No news or research item is a personal recommendation to deal.
Flexible Stocks & Shares ISA
Make your savings work harder & invest money with our flexible Stocks & Shares ISA. Invest up to £20,000 this tax year to shelter your investment returns from income and capital gains tax.
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