Monzo has issued an alert to customers with Individual Savings Accounts (ISAs), reminding them that the deadline to use their £20,000 allowance for the 2025-2026 tax year is fast approaching. A banner on the bank's website reads: "20 days left to use your ISA allowance." The tax year ends on April 5.
The £20,000 limit can be split across four types of ISA: cash ISA, stocks and shares ISA, innovative finance ISA, and Lifetime ISA. However, savers can only pay into one Lifetime ISA per tax year, with a maximum contribution of £4,000. Interest, income, and capital gains within ISAs are tax-free.
Personal finance expert Martin Lewis previously highlighted the deadline in his Money Saving Expert newsletter, stating: "Your money's nicer in an ISA, and now it's use it or lose it time! Top cash ISAs pay 4.68%, beating normal savings, though long-term shares ISAs are likely the winner." He advised against leaving it to the last minute, as some providers may close early.
Lewis also addressed whether it is worth opening a cash ISA if you won't use the full £20,000 allowance, noting: "It's just a savings account you don't pay tax on. So if the rate is higher than normal savings, even if you won't pay tax on interest, then put what you have in there." A fresh ISA allowance becomes available on April 6.
