Impact of earned ISA interest on following years allowance

navbop

I’ve not been a regular ISA saver but looking to change that and be better at maxing out the yearly 20k allowance. Something that has come up in conversation is that when your interest is paid on the ISA value annually (so 5-April) then that earned interest goes towards the next year allowance of 20k.

so for example 23/24 20k paid in, and on 5-April 2025 4k interest paid into the ISA account. Would this 4k then count towards the 20k allowance for 24/25 thus only being able to deposit £16k.

Appreciate the help. 

Sarahspangles

navbop said:

Something that has come up in conversation is that when your interest is paid on the ISA value annually (so 5-April) then that earned interest goes towards the next year allowance of 20k.

No, that’s wrong. You can contribute £20k each year, the interest goes into the ISA and is tax free and isn’t a ‘contribution’.

Reed_Richards

No impact whatsoever!