Martin Lewis has warned savers across the UK they could lose their £20,000 tax-free ISA allowance if they fail to act before the upcoming deadline.
In his latest newsletter, Mr Lewis issued what he described as a “four-week ISA deadline warning”, reminding readers that April 5 marks the final day to make use of the current tax year’s ISA allowance.
Mr Lewis said: “If you don’t use this year’s allowance, you lose it.”
He stressed that ISA allowances cannot be carried over into the next tax year.
“You can’t carry over your ISA allowance, so April 5 is the last date you can fill this year’s ISA. After that, it closes.”
Under current rules, UK adults aged 18 and over can deposit up to £20,000 each tax year into Individual Savings Accounts.
Savers can place the money in a cash ISA, a stocks and shares ISA, or split the allowance between the two.
Money held within an ISA grows free from Income Tax and capital gains tax.
Mr Lewis issued what he described as a four-week ISA deadline warning
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Martin Lewis
He said: “But think of an ISA wrapper like a protective piece of clingfilm you can wrap around some of the cake. Once your cash is inside, nothing changes – the only difference is now the tax collector can’t eat any.”
The Money Saving Expert founder also warned savers not to leave deposits until the final days before the deadline.
Mr Lewis said some providers may close applications before April 5.
He said: “Don’t leave it until the last minute, as some providers shut their (virtual) doors early.”
The ISA allowance resets each year on April 6, when a new tax year begins
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This means savers who have not yet used their allowance could deposit up to £20,000 before April 5 and then deposit a further £20,000 once the new tax year starts.
While there is a strict annual limit on contributions, there is no cap on the total amount someone can hold in ISAs.
Mr Lewis said some long-term savers have accumulated substantial balances by consistently using their yearly allowances.
He said: “Some now have £100,000s in cash ISAs, having used many years’ allowances, and there are some shares ISA millionaires.”
The warning comes amid reports of potential changes to ISA rules in the coming years.
Government proposals due to take effect from April 2027 would reduce the annual cash ISA allowance to £12,000 for savers under the age of 65.
Under those plans the £20,000 allowance for stocks and shares ISAs would remain unchanged.
For savers who prefer cash savings products, the proposed change would represent a reduction in the amount that can be placed in tax-free accounts each year.
Martin Lewis has warned savers across the UK they could lose their £20,000 tax-free ISA allowance if they fail to act before the upcoming deadline
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Mr Lewis said the current allowance remains valuable while the rules are unchanged.
Money already held within ISAs would remain protected from tax even if contribution limits change in the future.
Financial providers often increase promotional offers in the weeks leading up to the ISA deadline as they seek to attract deposits before the end of the tax year.
