We use cookies to allow us and selected partners to improve your experience and our advertising. By continuing to browse you consent to our use of cookies. You can understand more and change your cookies preferences here.


When you click on a retailer link on our site, we may earn affiliate commission to help fund our not-for-profit mission.Find out more.

13 Mar 2022

Four tips to maximise your Isas before the end of 2021-22 tax year

When it comes to your Isa allowance, you've got to use it or lose it

Time is running out to use your Isa allowance for 2021-22, which will renew once the new tax year begins on 6 April.

All UK adults have an Isa allowance of £20,000. Once the cash is saved in an Isa, any interest or investmentgrowth is tax-free, meaning you won't need to pay tax on savings interest, capital gains or dividendsthat can be charged on other savings and investments.

If you're lucky enough to have cash to spare it's a good time to use any remaining Isa allowance, as anything you don't use cannot be rolled over to future tax years.

Here, Which? reveals four ways to make the most of your Isa allowance for 2021-22.

Be more money savvy

Get a firmer grip on your finances with the expert tips in our Money newsletter – it's free weekly.

This newsletter delivers free money-related content, along with other information about Which? Group products and services. Unsubscribe whenever you want. Your data will be processed in accordance with our Privacy policy

1. Shop the best 'Isa season' deals

As we get closer to the Isa allowance deadline, some cash Isa providers will boost their interest rates in a bid to win savers who are looking to use up any remaining allowance.

The graph below shows average rates for instant-access Isas, one-year fixed-term Isas and long-term fixed Isas (those with a fixed term of 18 months or more) since April 2021, using data from Moneyfacts.

Average rates have all risen noticeably between February and March. This is particularly apparent with one-year fixed-term Isas, with average rates rising by 0.13%, from 0.59% to 0.72%. It's the steepest rate rise we've seen in more than a year; in fact, it's previously taken six months for rates to rise 0.14%, between August and February.

It's possible to find rates much higher than these averages, but some of the top deals don't hang around for long. At the time of writing, the top instant-access cash Isa paid 0.7% AER, and you could earn up to 1.16% AER with a one-year fixed-term cash Isa.

If you can commit to longer-term savings, you can earn up to 1.85% AER with a top-rate five-year fixed-term account.

While these rate rises could be down to banks gearing up for Isa season, it may also be due to last month's base rate rise. The next base rate decision is on 17 March and experts expect it to rise again, which could mean another boost to rates before 6 April.

Alternatively, you could get higher returns by investing with a stocks and shares Isa - we've recently shared some tips for novice investors.

2. Get up to £2,000 free with a lifetime Isa

If you time it right, it's possible to get a £2,000 lifetime Isa bonus over the next month.

Anyone who's eligible to open a lifetime Isa can do it now, pay in £4,000 to max out the allowance for 2021-22, and then pay in another £4,000 once the new tax year starts on 6 April.

The government will add a 25% bonus to whatever you deposit, up to £1,000 each tax year - meaning you could end up with a balance of £10,000 on your £8,000 savings in just a few weeks.

However, there are extra rules to bear in mind.

If you pay in £4,000 at the start of the 2022-23 tax year, you won't be able to deposit any more money until 6 April 2023 when the next tax year begins.

Any savers wanting to use the £10,000 towards a property deposit will have to wait until the lifetime Isa has been open for at least a year - but, during this time your money will continue to earn interest that you can also put towards your deposit.

3. Save £29,000 tax-free for teens

Savers who are 16 or 17 years old have the opportunity to save up to £29,000 before the tax year ends, as they are eligible to hold both a Junior Isa and an adult cash Isa.

Junior Isas can only be opened on a child's behalf by a parent or legal guardian, but parents, grandparents and friends can pay into the account for the child.

Children can take control of Junior Isas when they're 16, but no withdrawals can be made until they're 18.

You have to be 18 to open an adult stocks and shares Isa.

4. Watch out for early transfer deadlines

You can only pay into one of each type of Isa in each tax year, so if you see another account that you want to take advantage of before 6 April, you'll need to transfer your existing Isa from this tax year into the new account.

However, now it's so close to the end of the tax year, some providers are restricting transfers, so make sure you check deadlines with the individual providers.

What's more, not all Isa providers accept Isa transfers, so make sure you check out the terms and conditions before you apply.

  • What is the Isa allowance?

There are several rules you need to follow when saving with Isas. Everyone in the UK has an Isa allowance of £20,000 in 2021-22 - this is the total amount you're allowed to deposit into Isa products during the current tax year.

Whatever you don't use, you lose; the Isa allowance resets on 6 April for the new tax year and unused allowances cannot be rolled over.

The amount you can pay into different types of Isas can vary.

Cash Isas, stocks and shares Isas and innovative finance Isas can all receive up to £20,000 in each tax year. You can pay the whole allowance into one account, or mix it between different types of Isas.

You can only pay up to £4,000 into a lifetime Isa. The limit for Junior Isas in 2021-22 is £9,000, and this is set to remain the same in 2022-23.