Martin Lewis Best ISA Rates 2026 – Use £20,000 Before the 2027 Cut

Last updated: January 2026

TL;DR

• The ISA allowance for 2026 is £20,000, but it is scheduled to fall to £12,000 from April 2027.
• Using your full 2026 allowance protects more money permanently from tax.
• Leading easy-access cash ISA rates in early 2026 are typically offered by Trading 212 and Plum.
• An ISA becomes more efficient than savings once interest exceeds the Personal Savings Allowance (PSA).
• Existing ISAs should be moved using an official ISA transfer, not by withdrawing cash.

What “Martin Lewis Best ISA Rates” Actually Means

The term refers to the comparison principles popularised by Martin Lewis, founder of MoneySavingExpert.

It does not mean personal recommendations. It means:

• Whole-of-market comparisons
• Focus on the highest real rate, not headline marketing
• Willingness to switch when providers fall behind

This framework remains unchanged for 2026.

Why 2026 Is a Critical Year for ISAs

For the 2026/27 tax year, adults can still shelter £20,000 in ISAs.

Under current legislation:

• From April 2027, the ISA allowance is scheduled to fall to £12,000 for most people.

Practical impact

• ISA allowance is use it or lose it
• Unused allowance cannot be carried forward
• Money sheltered now stays tax-free forever

Using the full 2026 allowance protects £8,000 more from tax than waiting until 2027.

Best Cash ISA Rates 2026

Cash ISAs remain suitable for savings needed in the short to medium term.

Easy-Access Cash ISAs

In early 2026, market-leading easy-access rates have typically come from app-based and online platforms such as:

• Trading 212
• Plum

These providers tend to:

• Pass on rate changes faster
• Avoid loyalty penalties
• Sit above high-street banks for extended periods

Rates change frequently, so ongoing comparison is essential.

Fixed-Rate Cash ISAs

Fixed ISAs suit money you will not need during the term.

• Terms usually range from 1–5 years
• Rates are guaranteed
• Early access normally triggers penalties

Fixed ISAs often become more attractive when base rates peak or stabilise.

Martin Lewis’ Golden Rule: ISA vs Savings Accounts

“If tax will take a chunk of your interest, an ISA wins.”

This links directly to the Personal Savings Allowance (PSA).

Personal Savings Allowance (2026)

• Basic-rate taxpayers: £1,000
• Higher-rate taxpayers: £500
• Additional-rate taxpayers: £0

Interest above these limits is taxable.
ISA interest is always tax-free, regardless of amount.

Example Calculation

Inputs

• Savings balance: £20,000
• Interest rate: 5.0%

Calculation

• £20,000 × 5.0% = £1,000 interest

Outcome

• Basic-rate taxpayer: PSA fully used
• Higher-rate taxpayer: tax payable
• Same money in an ISA: £1,000 tax-free

Stocks & Shares ISAs in 2026

Stocks & shares ISAs are designed for long-term growth, not short-term certainty.

Suitable when:

• Time horizon is 5+ years
• You accept market volatility

Not suitable when:

• Money is needed soon
• Capital certainty is essential

Cash ISAs and investing serve different purposes.

ISA Transfers: How to Move Old ISAs Correctly

Many people searching for 2026 rates already hold ISAs opened in 2024 or 2025.

The key rule

Do not withdraw the money yourself.

Withdrawing:

• Removes the tax-free wrapper
• Risks breaching annual allowance limits

Correct process

• Open a new ISA with the chosen provider
• Request an official ISA transfer
• The provider moves the funds tax-free

This applies to both cash ISAs and stocks & shares ISAs.

Is This Financially Worth It?

• Using £20,000 in 2026 vs £12,000 in 2027
  • £8,000 permanently sheltered from tax
• 4.5% ISA vs 3.5% ISA
  • £20,000 earns ~£200 more per year
• ISA vs savings account
  • ISA wins once the PSA is exceeded

Outcome: Timing and rate discipline materially affect long-term results.

People Also Ask (PAA) & FAQs

What are the best ISA rates for 2026 according to Martin Lewis?

They are the highest-paying whole-of-market ISAs available at the time, typically from online or app-based providers rather than high-street banks.

Is the ISA allowance dropping in 2027?

Under current rules, yes. The annual allowance is scheduled to fall from £20,000 to £12,000 from April 2027.

Should I use my full ISA allowance in 2026?

If affordable, using the full allowance shelters more money permanently from tax than waiting until 2027.

Why does Martin Lewis favour ISAs over savings accounts?

Once interest exceeds the Personal Savings Allowance, tax applies. ISAs remove this tax completely.

Can I transfer an old ISA to a better rate?

Yes, using an official ISA transfer service. Never withdraw the funds yourself.

How often should ISA rates be checked?

At least once per year, or sooner if your rate falls more than 1% behind comparable accounts.