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ISA allowance 2022/23: How to make the most of your £20,000 ISA allowance

If there is ever a time to get your investments in order, it’s the beginning of the new tax year. With allowances reset, now is the opportunity for investors to evaluate their plans for the coming year, where their money sits, and how they should contribute in order to make the most of their money.

It is also the time to consider how much of your £20,000 ISA allowance to use in your individual savings accounts – for a full breakdown of how ISA limits work, read our guide – and how it is distributed. You can, for example, spread your annual ISA allowance across a mixture of different ISA types or portfolios. So, read on to find out all you need to know about how to invest your £20,000 allowance. Alternatively, get in touch, and we can talk you through your options.

📋 The most important ISA rule to remember?You can only invest the total ISA allowance into one of each type of ISA in the same tax year
🤔 Can I put 20000 in an ISA every year?Yes, you can
5️⃣ Five reasons why you should use your ISA allowance• Tax reliefs and exemptions
• Minimal amount needed to open and maintain an account
• Give your savings the chance to grow
• Withdrawal flexibility
• Transfers
📋 How many cash ISAs can I have?


You can have as many as you want

How does the ISA annual allowance work in practice?

An individual savings account (ISA) is a tax-free savings account that allows you to invest or save money in the UK. You can set aside money in an ISA each tax year without having to pay tax on your returns. But you can put a set amount into an ISA each year.

The tax season starts on April 6th and ends on April 5th next year, and the total ISA allowance 2022/23 is £20,000. This means that you can put a maximum of £20,000 into an ISA account without paying taxes. Any unused ISA allowance is not carried over into the next tax year’s allowance. Once a new tax year begins, you will be given a new ISA allowance which can change according to new government regulations. The £20,000 annual limit has not changed since the 2017/18 tax year, and will not change in 2023/24.

There are four types of ISA accounts. They include cash ISAs, lifetime ISAs, innovative finance ISA, and stocks and shares ISAs. One of the ISA rules is that you can only invest the total ISA allowance into one of each type of ISA in the same tax year. Here are examples of how you can spread your ISA allowance across the various types of ISAs.

  • You can invest £12,000 in a stocks and shares ISA, £7,000 in a cash ISA, and £1,000 in a lifetime ISA.
  • You can invest £10,000 in a cash ISA, £5,000 in a stocks and shares ISA, £2,000 in a lifetime ISA and £3,000 in an innovative finance ISA.

What are the different types of ISA allowance?

When we talk about investing in an individual savings account, we generally mean a stocks and shares ISA. However, if you are wondering, ‘Can I put 20000 in an ISA every year?’ the answer is yes, but the different types of ISAs come with different ISA allowance rules. The most common types of ISA are Cash ISAs, Junior ISAs and Lifetime ISAs.

The Cash ISA allowance is the same as a stocks and shares ISA; £20,000 per year. The only real difference with a Cash ISA is the assets you’re investing in. The Junior ISA allowance, or JISA allowance, is £9,000 per tax year for 2022/23, unchanged from the previous year. For Junior ISAs, a parent or guardian can invest in either cash Junior ISA or stocks and shares Junior ISA, and it can only be accessed once the child turns 18 (though they can manage the account from 16 onwards). At age 16, the child can open an adult Cash ISA alongside the Junior ISA and save an additional £20,000.

The Lifetime ISA allowance is a little more complicated. You can only put in £4,000 per year and must contribute at least once before turning 40. Also, you can only contribute to the ISA until you’re 50. With these conditions being met, the government will add a 25% bonus to your pot, up to £1,000 per year. Contributions into Lifetime ISAs are also used for first-time property purchases.

The stocks and shares ISA may be the best option for an ISA wrapper for people looking to invest a substantial amount in a tax-free manner. However, if you want to use all your ISA allowance per year or even just part of it, we recommend doing a thorough research and assessing precisely what you’re saving for before you start.

Use as much as possible

With an individual savings account, the first point to make is straightforward: utilise as much of your annual ISA allowance as you can afford. Of course, this doesn’t mean that you should strive to put £20,000 into your ISA account every year; very few people can do that. What it does mean, however, is that you could better utilise any money you come into an ISA through investing.

So long as you’ve paid off any existing, expensive debt and saved enough as a rainy-day fund, utilising as much of your allowance as possible is highly recommended. ISA allowances operate on a ‘use it or lose it’ basis, so any unused annual allowance doesn’t roll over and is lost.

This is also a point about when you should invest. The answer, almost always, is “now”. We’ve written a few times about the pitfalls of trying to time the market or holding off on investing for whatever reason. In almost all cases, it’s more beneficial for savers to invest as early as possible and avoid missing out on the historic ‘boom days’ that can make all the difference to long-term returns.

Consider multiple portfolios

Understanding how ISAs work is just as important as asking the question, ‘Can I put 20000 in an ISA every year?’. For example, you can’t invest in two different stocks and shares ISAs. However, you can create multiple portfolios within the same ISA – it’s one ISA account but achieved across multiple portfolios.

There are a few reasons why you might want to do this, but the most common is as a means to drip-feed cash into the markets. Say, for instance, you have a medium-high-risk portfolio for long-term investing – you might want to move the rest of your money out as cash, but you are reluctant to allocate it all into that portfolio at once. You could, then, open a lower-risk portfolio within the same ISA and hold your cash there.

This makes it easy to move your money between risk levels, have a clear picture of how much of your £20,000 allowance you’ve used, and plan ahead with your investment consultant. With cash not representing the long term opportunity it once did, holding these savings in a lower-risk portfolio could give them a better chance of retaining and growing their value over time. In addition, by having your savings held within your ISA portfolio, you can take advantage of the tax benefits of your £20,000 allowance without committing all your money to a higher-risk portfolio.

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Capital at risk. Tax treatment depends on your individual circumstances and may be subject to change in the future.

Opening a second portfolio within the same ISA is simple. With a Moneyfarm account, all you need to do is follow the online portfolio creation process again or simply get in touch with a member of our investment consultancy team to get one set up.

Remember the basics

When using your ISA allowance, the final thing to remember is not to lose sight of the basics. The run-up to the end of the tax year is a big time for financial providers, who will often offer promotions and discounts to encourage people to invest. These are well worth considering, but it’s crucial to not divert from these fundamentals:

Think long term. Even in times of relative uncertainty, a long-term investment strategy is still valid. Disinvesting, moving money between risk levels or trying to time the market can be tempting, but sticking with the plan is the way to reach your long-term goals. Of course, markets will rise and fall in the short term, but the trajectory looks a lot smoother over a long enough timeline.

Diversification. When deciding how to use your allowance, try to avoid being swayed by the news of certain stocks or markets going through the roof. Betting on the success of a limited pool of assets is inherently risky, so investors should remember to keep diversification as a central pillar of their strategies. At Moneyfarm, we invest across asset types and geographies, using carefully curated ETFs to provide all the protection in diversity that our clients need.

Get advice. The run-up to the end of the tax year also represents an ideal opportunity to seek advice from your investment consultant. If your ISA provider, like Moneyfarm, offers consultancy at no extra cost, it’s worth checking in to see how your investments are doing and discussing your options going forward. Semi-regular check-ups like these mean that you’re always in the loop.

Five reasons why you should use your ISA allowance

  1. Tax reliefs and exemptions

Investors who hold their investments in an ISA get a tax break. You can invest your money in an ISA without paying income tax or capital gains taxes. In addition, you don’t pay taxes on the dividends you receive from investments held in an ISA.

  1. Minimal amount needed to open and maintain an account

You don’t need thousands of pounds to start investing in an ISA. But there is a limit to how much you can put in an ISA each year. The ISA allowance 2022/23 limit for the tax year is £20,000.

  1. Give your savings the chance to grow

Along with the tax benefits, ISAs also give your savings a great chance to grow over the long-term. Taking into account factors like compound interest and active portfolio management, an ISA becomes a very attractive place for your wealth to be. Of course, investments can go down as well as up, and you may get back less than you put in, but it’s worth exploring your options if you want to protect and grow your wealth long-term.

  1. Withdrawal flexibility

ISAs are becoming more flexible. For example, you can now withdraw and replace cash into a cash ISA account in the same tax year without affecting your annual allowances. However, not all ISA providers offer such flexibility, so you ask about it before you open an account.

  1. ISA transfers

ISA transfers are possible and straightforward. There are several reasons why people transfer: you might want to switch providers due to better interest rates, consolidate all your accounts or transfer your cash ISA into a Stocks and Shares ISA.  It would be best to be mindful when switching providers. Before transferring your ISA, check what charges, exit penalties, and benefits you might lose. So make sure to seek professional financial advice.


Can I put 20000 in an ISA every year?

Yes, you can put 20K into an ISA each year as the annual ISA allowance for 2022/23 is £20,000. Also, you can distribute the ISA allowance across the different types of ISA accounts.

Can I add to my Cash ISA every year?

Yes, you can add money to your Cash ISA every year, as long as the total amount does not exceed the £20,000 annual ISA allowance limit. However, if you contribute to more than one type of ISA during the same tax year, the total amount contributed across all ISAs should not exceed £20,000.

How often can you add to an ISA?

You can contribute to an ISA whenever you want during the tax year, up to the £20,000 annual limit in the current tax year.

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Capital at risk. Tax treatment depends on your individual circumstances and may be subject to change in the future.

*Capital at risk. Tax treatment depends on your individual circumstances and may be subject to change in the future.