As the new tax year approaches, savers and investors will be considering how to maximise their tax-free allowances through Individual Savings Accounts (ISAs). With the cost of living and inflation continuing to be key financial concerns, understanding ISA limits, how they have evolved over recent years, and what they mean for long-term savings strategies is more important than ever. In this piece, we’ll examine ISA allowances over the last few years and considerations in both the adult and Junior ISA market. 

The ISA Allowance for 2025/26: Stability Over Change

For the 2025/26 tax year, the standard ISA allowance remains unchanged at £20,000 per individual. This means savers can split their contributions across multiple ISAs, including:

• Cash ISAs – Tax-free interest on savings.

• Stocks and Shares ISAs – A tax-efficient way to invest in the market.

• Innovative Finance ISAs – Supporting peer-to-peer lending.

• Lifetime ISAs (LISAs) – Up to £4,000 per year, with a 25% government bonus, for first-time homebuyers or retirement.

Despite speculation in previous years that ISA limits might increase to encourage saving, the allowance has remained static at £20,000 since 2017, meaning its real-term value has diminished against inflation.

The Junior ISA Allowance: A Look at the Past Three Years

The Junior ISA (JISA) allowance for 2025/26 remains at £9,000—a level that was set in the 2020/21 tax year and has not changed since. Looking back over the last three years:

• 2024/25: £9,000

• 2023/24: £9,000

• 2022/23: £9,000

Before 2020, the Junior ISA allowance was just £4,368, meaning there was a significant boost when the government more than doubled the limit. However, since then, it has remained static, despite ongoing inflationary pressures reducing the real-term value of these contributions.

For parents looking to save for their child’s future, ensuring that contributions are not only maximised but also effectively invested is key — particularly in the face of rising costs, and, of course, inflation. 

How The Children’s ISA Is Designed to Outpace Inflation

One of the biggest challenges for long-term savings is ensuring that returns outpace inflation. While a Cash Junior ISA offers security, it is vulnerable to the erosion of purchasing power over time if interest rates fail to keep up with inflation.

This is where a Junior Investment ISA, such as the Children’s ISA, provides a compelling alternative. Designed for long-term growth, it allows parents to invest tax-free in a diversified portfolio of stocks, shares, and funds, helping to protect the real value of savings.

Why Choose The Children’s ISA?

The Children’s ISA is tailored for parents and guardians seeking a disciplined, tax-efficient way to build a financial foundation for their child. By investing over a long period, the potential for compound growth helps mitigate the effects of inflation, ensuring that a child’s savings have the opportunity to grow in real terms.

Unlike Cash ISAs, which are subject to fluctuating interest rates, a Junior Investment ISA aims to deliver long-term capital appreciation, positioning it as a strong choice for parents focused on future financial security.

Final Thoughts

With ISA allowances remaining unchanged for 2025/26, parents and investors need to consider how to make the most of these tax-efficient savings options. While the Junior ISA allowance remains at £9,000, how these funds are managed can have a significant impact on their future value.

By choosing an investment-focused Junior ISA, such as the Children’s ISA, parents can help ensure that their child’s savings are working harder, potentially providing greater financial flexibility when they turn 18.