ISA Calculator (UK)
Estimate how much your UK Individual Savings Account (ISA) could grow tax-free, and compare it with a taxable account.
Annual allowance: £20,000. Lifetime ISA bonus: 25% on contributions up to £4,000/year.
Contributions across all ISAs must stay within your annual allowance.
Cash ISAs often 3–5%; Stocks & Shares ISAs can be higher but more volatile.
Used only for the taxable account comparison. ISA growth is tax-free.
This tool is for education only and is not financial advice.
Results
ISA (tax-free)
All growth is free from UK Income Tax and Capital Gains Tax.
- Total contributions
- £0
- Government bonus (LISA only)
- £0
- Future value
- £0
- Investment growth
- £0
- Real value (after inflation)
- £0
Equivalent taxable account
Assumes returns are taxed each year at your marginal rate.
- Total contributions
- £0
- Tax paid on returns
- £0
- Future value after tax
- £0
- Investment growth after tax
- £0
- Real value (after inflation)
- £0
ISA advantage
- Extra money with ISA vs taxable
- £0
- Effective tax saved on growth
- £0
How this UK ISA calculator works
This ISA (Individual Savings Account) calculator estimates how your savings or investments could grow inside a UK ISA compared with a standard taxable account. It supports:
- Cash ISAs
- Stocks & Shares ISAs
- Lifetime ISAs (LISAs) with the 25% government bonus
- Junior ISAs
You can set an initial lump sum, regular monthly or annual contributions, an expected annual return, and your tax rate. The tool then:
- Calculates the future value of your ISA, assuming returns are compounded annually.
- Calculates the future value of an equivalent taxable account, assuming tax is paid on growth each year.
- Shows the tax saved and extra money you keep by using an ISA.
- Optionally adjusts everything for inflation to show results in today’s money.
Formulas used
We use standard compound interest formulas with annual compounding.
1. Future value of a lump sum
Let:
- \( P \) = initial deposit
- \( r \) = annual interest/return rate (decimal)
- \( n \) = number of years
Then:
\[ FV_{\text{lump}} = P \times (1 + r)^n \]
2. Future value of regular contributions
For a regular contribution \( C \) made once per year at the end of each year:
\[ FV_{\text{contrib}} = C \times \frac{(1 + r)^n - 1}{r} \]
For monthly contributions, we convert to an equivalent annual rate and approximate using the same formula with an annualised contribution.
3. Taxable account vs ISA
For the taxable account, we reduce the effective growth rate by your tax rate on returns:
\[ r_{\text{after tax}} = r \times (1 - t) \]
where \( t \) is your marginal tax rate (e.g. 0.20, 0.40, 0.45).
We then apply the same future value formulas using \( r_{\text{after tax}} \). The difference between ISA and taxable future values is the tax saved.
4. Inflation adjustment (real value)
To show results in today’s money, we discount by inflation:
\[ FV_{\text{real}} = \frac{FV_{\text{nominal}}}{(1 + i)^n} \]
where \( i \) is the annual inflation rate.
ISA allowances and limits (high-level overview)
Important: These figures can change with each tax year. Always check the latest HMRC guidance.
- Adult ISA allowance: Typically £20,000 per tax year across all your ISAs.
- Lifetime ISA (LISA): Up to £4,000/year, with a 25% government bonus. Withdrawals for non-qualifying purposes usually incur a penalty.
- Junior ISA: A separate allowance for children, on top of the adult allowance.
This calculator does not enforce annual allowance caps; it assumes your contributions stay within the rules. Use it to explore scenarios, then cross-check with current HMRC limits.
Interpreting your results
- Total contributions: The total amount you personally pay in over the period.
- Government bonus: For LISAs, 25% of eligible contributions (up to the annual LISA limit).
- Future value: The projected pot size at the end of the period.
- Investment growth: Future value minus your contributions (and bonus, for LISAs).
- ISA advantage: How much more you could have by using an ISA instead of a taxable account.
Frequently asked questions about UK ISAs
What is an ISA?
An Individual Savings Account (ISA) is a UK tax wrapper that lets you earn interest, dividends and capital gains free from UK Income Tax and Capital Gains Tax, subject to annual allowance limits.
Which ISA type should I choose?
It depends on your goals and risk tolerance:
- Cash ISA: Lower risk, typically lower returns. Suitable for short-term savings and emergency funds.
- Stocks & Shares ISA: Higher risk, potentially higher long-term returns. Suitable for long-term investing.
- Lifetime ISA: Designed for first-home purchase or retirement, with a 25% government bonus but withdrawal restrictions.
- Junior ISA: Long-term savings/investments for children, locked until age 18.
Does this calculator include the Personal Savings Allowance or Dividend Allowance?
No. To keep the comparison simple and transparent, the taxable account assumes all returns are taxed at your marginal rate every year. In reality, you may benefit from allowances that reduce the tax you pay outside an ISA, especially on smaller balances.
Is this financial advice?
No. This tool is for educational and illustrative purposes only. It uses simplified assumptions and cannot account for all tax rules, charges, or market risks. Always check current HMRC guidance and consider speaking to a regulated financial adviser before making investment decisions.