Cash ISA savers can go above £20,000 limit with little-known rule

Chancellor Rachel Reeves has U-turned and shelved any immediate plans to change cash Individual Savings Accounts (ISAs), meaning savers can continue to put up to £20,000 a year in savings and investments to protect returns from taxation. However, there is a little-known yet completely legal rule that allows savers to push past that figure.

By utilising the Additional Permitted Subscription (APS), an increased ISA allowance is available to a surviving spouse or civil partner. This allows them to make additional contributions to their ISA, equivalent to the value of their deceased partner's ISA, up to a certain point. According to BirminghamLive, Sarah Coles from Hargreaves Lansdown said: "These inherited allowances aren’t always well understood, but can be incredibly valuable - potentially protecting tens of thousands of pounds from tax."

Following the death of someone with an ISA, their accounts become what’s known as "continuing ISAs". These continue to accrue growth or interest for up to three years.

The rules of the APS allow for the surviving spouse or civil partner to inherit the extra tax-free ISA allowance equal to the value of their late partner’s ISAs at death. This is in addition to their own £20,000 ISA limit.

To be eligible, you must have been legally married or in a civil partnership and living together at the time of death. Claims must also be made within three years of your partner’s death or 180 days following completion of their estate administration, whichever is later.

Meanwhile, the best ISA for UK savers has been revealed, one that gives savers a "healthy return" on the money they put away.

According to Money.co.uk, the best ISA for savers to get is the Wesleyan With Profits Stocks and Shares ISA. The company won the award for 'Best ISA Provider of the Year' at the Wealth & Asset Management Awards 2025 in May and was praised for its financial and non-financial benefits.

"The Wesleyan With Profits Fund holds more than £4 billion of customer investments, as at November 2024, across a diverse mix of asset classes," the judging panel revealed. "Boasting a strong long-term performance track record, the fund has delivered healthy financial returns for the firm’s With Profits ISA plan holders, which was highly commended by the judges."