UK ISA Calculator: Future Value of a Tax-Free Lump Sum
Work out what a lump sum invested in a UK Individual Savings Account (ISA) grows to over time — with all growth, interest, and gains free of UK income tax and capital gains tax.
Adjust the inputs and select Calculate for a full breakdown.
Compare Common Scenarios
How the numbers shift across typical situations for this calculator:
| Scenario | Future value | Total growth |
|---|---|---|
| £20k · 5% · 10yr | $32,577.89 | $12,577.89 |
| £10k · 6% · 20yr | $32,071.35 | $22,071.35 |
| £50k · 5% · 15yr | $103,946.41 | $53,946.41 |
| £5k · 7% · 25yr | $27,137.16 | $22,137.16 |
How This Calculator Works
Enter your ISA lump sum, the annual return you expect, and how many years it stays invested. The calculator compounds the amount and shows the ending value and total growth. The ISA wrapper means no UK tax on the interest, dividends, or capital gains earned inside it.
The Formula
Future Value of a Lump Sum
PV = present value, r = annual rate, n = number of years
Worked Example
£20,000 invested in a Stocks & Shares ISA at 5% for 10 years grows to about £32,578 — with roughly £12,578 of tax-free growth. The ISA's appeal is the tax shelter: contributions are from after-tax income (no upfront relief), but all returns inside the ISA are free of UK income tax, dividend tax, and capital gains tax, and withdrawals are tax-free too. There are several ISA types — Cash ISA, Stocks & Shares ISA, Lifetime ISA, and Innovative Finance ISA — sharing one annual allowance.
Key Insight
The ISA is the cornerstone tax-free savings/investment wrapper in the UK, and using it well means matching the ISA type to your goal and using the annual allowance. The main types share a single annual ISA allowance (the total you can pay in across all ISAs per tax year): a Cash ISA (tax-free interest, like a savings account), a Stocks & Shares ISA (tax-free investment growth — best for long horizons, modelled here), a Lifetime ISA or LISA (for first home or retirement, with a 25% government bonus but withdrawal restrictions), and an Innovative Finance ISA (peer-to-peer lending). Key points: this calculator shows a Stocks & Shares ISA lump sum, where the tax-free compounding of investment returns over years is most valuable; the annual allowance resets each tax year (use it or lose it — unused allowance doesn't carry forward, unlike a pension), so many investors contribute before the 5 April tax-year end; and platform and fund fees reduce real returns, so favour low-cost options. ISA vs pension: a pension gives upfront tax relief but locks money away until a minimum age and is taxed on withdrawal (beyond the tax-free lump sum), while the ISA gives no upfront relief but offers tax-free, fully-flexible access — many use both, often the pension for retirement and the ISA for flexibility and medium-term goals. The projection is a constant-return estimate (real markets vary), but every pound of growth shown is free of UK tax.
Frequently Asked Questions
How is ISA growth calculated?
The lump sum is multiplied by (1 + annual return) raised to the number of years. £20,000 at 5% for 10 years is £20,000 × 1.05¹⁰ ≈ £32,578 — all of it tax-free within the ISA.
Is ISA growth really tax-free?
Yes. Contributions come from after-tax income (no upfront tax relief), but all interest, dividends, and capital gains earned inside the ISA are free of UK income tax, dividend tax, and capital gains tax — and withdrawals are tax-free too. That tax shelter is the ISA's core benefit.
What are the different types of ISA?
Cash ISA (tax-free interest), Stocks & Shares ISA (tax-free investment growth, modelled here), Lifetime ISA/LISA (first home or retirement, with a 25% government bonus but withdrawal rules), and Innovative Finance ISA (peer-to-peer lending). They share a single annual ISA allowance across all types.
Does the ISA allowance carry forward?
No — unlike pension allowances, unused ISA allowance does not carry to the next tax year (use it or lose it). The allowance resets each tax year, which is why many investors top up their ISA before the 5 April tax-year end to avoid losing that year's allowance.
ISA or pension — which should I use?
A pension gives upfront tax relief but locks money away until a minimum age and is taxed on withdrawal (beyond the tax-free lump sum); the ISA gives no upfront relief but offers tax-free, flexible access at any time. Many people use both — the pension for retirement, the ISA for flexibility and medium-term goals.
Related Calculators
Methodology & Review
Future value is the lump sum compounded at the annual return over the period. It assumes the amount is invested at once within an ISA and left untouched at a constant return; it ignores platform/fund fees and does not enforce the annual ISA allowance.
Written by Ugo Candido · Last updated May 22, 2026.