Compare ISA types and project compound growth on your tax-free savings.
This calculator provides estimates for guidance only. It does not constitute financial advice. ISA allowances, LISA bonus rules, and tax treatment may change. Always verify with HMRC or a qualified financial adviser.
Individual Savings Accounts (ISAs) are tax-free wrappers that allow UK residents to save and invest without paying tax on interest, dividends, or capital gains. With an annual allowance of GBP 20,000 for 2026-27, ISAs are one of the most tax-efficient ways to build wealth over time. There are several types of ISA available. A Stocks and Shares ISA lets you invest in funds, shares, and bonds with the potential for higher long-term returns. A Cash ISA pays a guaranteed interest rate, making it suitable for shorter-term savings or those who prefer no risk to capital. The Lifetime ISA (LISA) is designed for first-time home buyers and retirement savers aged 18 to 39 -- you can contribute up to GBP 4,000 per year and receive a 25% government bonus of up to GBP 1,000 annually. Understanding which ISA suits your goals and how compound growth multiplies your savings is key to making the most of your allowance.
To project your ISA growth: 1. Select your ISA type. Choose from Stocks and Shares ISA, Cash ISA, or Lifetime ISA. Each has different characteristics: Stocks and Shares ISAs are invested in the market, Cash ISAs earn fixed interest, and LISAs receive a 25% government bonus. 2. Enter your annual contribution. This is how much you plan to save each tax year. The maximum across all ISAs is GBP 20,000 per year. For a LISA, the maximum contribution is GBP 4,000 per year (which counts towards the GBP 20,000 total). 3. Enter your existing ISA balance. If you already have savings in an ISA, enter the current value. This forms the starting point for the projection. 4. Set the expected growth rate. For a Stocks and Shares ISA, 4-7% is a common long-term assumption. For a Cash ISA, use the current interest rate offered by your provider (typically 2-5%). Growth rates are not guaranteed. 5. Set the investment period. Enter how many years you plan to hold the ISA. Longer periods allow compound growth to work more effectively, which is why starting early makes such a difference. 6. View the results. The calculator shows your projected ISA value, total contributions, growth earned, and any government bonus (LISA only). The line chart visualises year-by-year growth.
The ISA projection uses compound growth with annual contributions. Each year, the balance grows as follows: new balance = (previous balance + annual contribution + bonus) x (1 + growth rate). For a Stocks and Shares ISA or Cash ISA, the annual contribution is added directly. For a Lifetime ISA, the contribution is capped at GBP 4,000 per year, and a 25% government bonus (up to GBP 1,000) is added on top. The compound growth formula means your returns generate their own returns in subsequent years. For example, GBP 10,000 per year at 5% growth does not simply produce GBP 5,000 in returns over 10 years. Instead, the compounding effect means the total after 10 years is approximately GBP 132,068 -- significantly more than the GBP 100,000 contributed. The LISA bonus is particularly powerful because the 25% bonus itself earns compound growth in subsequent years. Over 20 years of maximum LISA contributions at 5% growth, the GBP 20,000 in government bonuses alone would grow to substantially more than GBP 20,000 through compounding.
ISAs are completely tax-free: you pay no income tax on interest, no capital gains tax on profits, and no tax on dividends. This makes them especially valuable for higher-rate taxpayers who would otherwise pay 40% on savings interest and 33.75% on dividends. You can hold multiple types of ISA in the same tax year, as long as the total contributions across all ISAs do not exceed GBP 20,000. You can also transfer ISAs between providers and between types without affecting your annual allowance. The Lifetime ISA has important restrictions: withdrawals for anything other than a first home purchase (up to GBP 450,000) or after age 60 incur a 25% government withdrawal charge, which effectively means you lose your bonus and a portion of your own contributions. The LISA can only be opened by those aged 18 to 39, though you can continue contributing until age 50. Flexible ISAs allow you to withdraw and replace money within the same tax year without it counting towards your allowance. Not all providers offer flexible ISAs, so check with your provider if this feature is important to you.