Last updated: May 2026 · Sourced from official UK government publications
📚 Plain-English explainer. All limits drawn from HMRC and gov.uk. Not financial advice. See disclaimer below.
Yes. Money you put into a Lifetime ISA counts towards the £20,000 annual ISA allowance. The 25% government bonus does not. Below is how the allowance splits across ISA types, what the rules let you do, and the common mistakes that cost people the bonus.
The total amount you can pay into all ISAs in a single tax year is £20,000. The tax year runs 6 April to 5 April the following year. Inside that £20,000 you can mix:
The LISA cap is the only sub-limit. The other ISA types share the rest of the £20,000 between them.
Every £1 paid into a LISA reduces your remaining ISA allowance by £1. Pay the full £4,000 LISA cap and you have £16,000 left for the other ISA types. The 25% government bonus is added on top by HMRC and is not counted, so the total cash ending up in the wrapper can be £25,000 in a year (£16,000 in other ISAs + £4,000 personal LISA + £1,000 LISA bonus).
| Allowance | 2025/26 limit |
|---|---|
| Overall ISA allowance | £20,000 |
| Lifetime ISA (sub-cap, included in £20,000) | £4,000 |
| Junior ISA (separate, for under-18s) | £9,000 |
| LISA government bonus (paid on top) | £1,000 max |
Yes. The LISA and the Stocks & Shares ISA are different ISA categories. You can pay into both in the same tax year. The combined contributions cannot exceed £20,000.
From April 2024, the rules also allow you to pay into multiple ISAs of the same type within the same tax year. So you could open two stocks and shares ISAs alongside a LISA and a cash ISA, provided the total stays at or below £20,000. Not every provider supports the new flexibility yet, so check before splitting.
A common arrangement for first-time buyer savers is £4,000 LISA + £16,000 cash ISA. The LISA captures the maximum £1,000 bonus and is held in cash to protect against short-term market falls. The remaining £16,000 sits in a cash ISA where it earns interest tax-free.
For longer-term savers (10+ years), some choose to hold the LISA inside a Stocks & Shares LISA wrapper for higher potential growth. Others prefer the certainty of cash. The right choice depends on time horizon and risk appetite, both of which are personal.
Before April 2024, you could only open one ISA per type per tax year. The 2024 reform removed that for cash, stocks & shares, and innovative finance ISAs, but kept it for the Lifetime ISA. So:
Transfers between providers do not count as new contributions, so transferring a LISA to a different provider in the same tax year does not breach the one-LISA rule.
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Subscribe free →Yes. Pay £4,000 to a LISA and you have £16,000 left for other ISAs. The 25% bonus is on top and does not count.
Yes. They are separate ISA categories. Your combined contributions cannot exceed £20,000 in a tax year.
Both allowed. Combined contributions count towards £20,000. The £4,000 LISA sub-cap is inside that figure.
Provider-to-provider transfers do not count as new contributions. Transfers out of a LISA before age 60 (other than for a first home) trigger the 25% withdrawal charge.