How the ISA allowance actually works
Every UK adult gets a £20,000 ISA allowance per tax year (2024-25). The allowance is shared across Cash ISAs, Stocks and Shares ISAs, Innovative Finance ISAs, and Lifetime ISAs (LISA contributions cap separately at £4,000 but count inside the £20,000). The tax year runs 6 April to 5 April. Any unused allowance does not roll into next year. From April 2024 you can also pay into multiple ISAs of the same type in the same year, as long as the total stays inside the cap.
If you pay in £20,000 each tax year for 20 years and invest it in a global tracker at 7% real returns, you contribute £400,000 of your own money and end with roughly £820,000, every penny outside the tax net. Miss five years entirely and the same trajectory ends near £600,000. Each unused year is gone forever the day the tax year closes.
Waiting until March to top up the ISA. Markets do not care about the UK tax year, and you lose 11 months of tax-sheltered compounding. Set a monthly direct debit on 6 April for £1,667 and forget about it.
A 60-second lesson on this, with a worked drill, lives inside the Finlo app. Free, forever, on the basics.