ISA Comparison: Which ISA is Best in the UK?
After covering each ISA in detail, it’s time to bring them all together. This post puts Cash, Stocks & Shares, Lifetime, Junior, Help-to-Buy, and Innovative Finance ISAs side by side – showing how they compare and how you might combine them.
A quick refresher on ISA allowance
- Adults: £20,000 per year (2025/26), split across Cash, Stocks & Shares, Lifetime, or Innovative Finance ISAs.
- Junior ISAs: separate £9,000 allowance, on top of the adult limit.
- Transfers: you can move ISAs between providers without losing your allowance, provided you use the transfer process.
Comparison table: all ISA types
| ISA Type | Annual Limit | Bonus | Tax Benefits | Risks | Access Rules | Best For |
|---|---|---|---|---|---|---|
| Cash ISA | £20k shared allowance | None | Interest tax-free | Inflation risk, rates may drop | Easy access or fixed-term | Cautious savers, short-term goals |
| Stocks & Shares ISA | £20k shared allowance | None | Dividends and gains tax-free | Market volatility | Withdraw anytime (may take days) | Long-term investors, retirement saving |
| Lifetime ISA (LISA) | £4k (within £20k) | 25% up to £1k/year | Growth tax-free, bonus added | Penalty if withdrawn early | First home ≤£450k or retirement at 60 | First-time buyers, extra retirement pot |
| Junior ISA (JISA) | £9k (separate) | None | Interest/dividends tax-free | Locked until age 18 | Child gains control at 18 | Parents/grandparents saving for children |
| Help-to-Buy ISA | Closed to new, legacy | 25% up to £3k | Interest tax-free, bonus added | Low limits, legacy only | Bonus only on home purchase | Existing account holders until 2029 |
| IFISA | £20k shared allowance | None | Interest tax-free | Borrower defaults, platform risk | Locked until loans repaid | Experienced, risk-tolerant investors |
Strategies for combining ISAs
Most people will use more than one type over their lifetime. A few examples:
- Young renter (age 25): Split allowance between a Stocks & Shares ISA (£10k) for long-term growth and a Lifetime ISA (£4k) for a first home.
- Parent (age 40): Set aside £7k in a Stocks & Shares ISA for retirement, hold £5k in a Cash ISA for emergencies, and contribute to a Junior ISA with gifts from grandparents.
- Saver in their 50s: Prioritise Stocks & Shares ISAs for long-term growth, with a healthy Cash ISA buffer for flexibility. By this stage, LISAs are no longer available, so focus shifts to efficiency and liquidity.
- Experienced investor: After maxing out Cash and Stocks & Shares ISAs, consider a small IFISA allocation for diversification – recognising the risks.
Worked case study: With the full £20,000 allowance you might allocate £6,000 to a Cash ISA (emergency fund and short-term needs), £10,000 to a Stocks & Shares ISA (long-term growth), and £4,000 to a Lifetime ISA (house purchase or retirement). That blend balances liquidity, growth, and government incentives.
Fees: what to expect
Fees are often overlooked, but they make a huge difference over decades.
- Cash ISAs – Usually free. The “cost” is built into the interest rate offered, so it’s about shopping around for the best rate.
- Stocks & Shares ISAs – Expect:
- Platform/admin fees: typically 0.2%–0.4% per year for flat-fee platforms, up to 0.5%–1% for percentage-based providers.
- Fund charges: index funds and ETFs often 0.05%–0.25%; active funds 0.5%–1%+.
- Trading fees: some providers charge per trade, others bundle into platform cost.
- Lifetime ISA (investment version) – Same as Stocks & Shares ISAs, plus possible account-specific charges. The government bonus usually outweighs the cost if used correctly.
- Junior ISA – Fee structure mirrors adult Cash or Stocks & Shares ISAs, depending on type.
- IFISAs – Charges vary but often higher than mainstream platforms, sometimes 1%–2% annual fees or embedded margins within borrower rates. Liquidity risk is an additional “hidden cost” not seen in the fee schedule.
Key point: A 0.5% annual fee might not sound like much, but on £50,000 over 20 years it could mean £10,000 less in your pocket. Always compare net-of-fee returns.
Practical tips
- Always use the official transfer process when moving ISAs, to preserve your allowance.
- Compare fees on Stocks & Shares ISAs – small differences compound over time.
- Check eligibility rules before opening LISAs or JISAs.
- Think about liquidity – avoid locking money away in a product you may need to access early.
- Revisit choices each tax year; your goals may change.
A decision framework
- Define your goal – short-term savings, long-term investing, first home, retirement, or children.
- Match the ISA – Cash for short-term, Stocks & Shares for long-term, LISA for first home/retirement, JISA for children, IFISA for niche exposure.
- Diversify within allowance – mix Cash and Stocks & Shares, add Special ISAs if relevant.
Conclusion
ISAs aren’t complicated once broken down. Each has its place, and most savers will use more than one over their lifetime. The key is to match the right ISA to the right goal, understand the restrictions, and review your mix as life circumstances change.
Fees, access rules, and personal priorities often matter more than chasing the “best” ISA. A boring, consistent approach is usually the winning one.
This completes the ISA Series. For deeper dives into each type, see the earlier posts on Traditional ISAs, Special ISAs, and Innovative Finance ISAs.