Why doesn't ISA room carry forward?
By rule. The ISA allowance resets every 6 April. Unlike pension carry-forward (3 years), unused ISA capacity is permanently lost, which is why maxing each tax year matters even with partial contributions.
The UK tax code is unusually generous if you know where to look. ISA, pension, LISA, EIS, VCT, CGT, dividend, this audit ranks them by leverage so you know where to start.
Higher rate (40%) · 5 actions
2025/26 UK rates embedded: ISA £20,000, pension annual allowance £60,000 (tapered above £260,000 combined income), LISA £4,000 + 25% bonus (open under 40, top up under 50), CGT allowance £3,000, dividend allowance £500, EIS 30% income-tax relief. Not advice.
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By rule. The ISA allowance resets every 6 April. Unlike pension carry-forward (3 years), unused ISA capacity is permanently lost, which is why maxing each tax year matters even with partial contributions.
For most higher-rate taxpayers: pension first, especially via salary sacrifice for the NI saving. For basic rate it's closer to a tie. For early retirees with bridge years before pension age, ISA matters more than the marginal math suggests.
Personal Allowance is reduced by £1 for every £2 of income above £100,000, fully gone by £125,140. The effective marginal rate in that band is 60% (40% basic + 20% PA-loss). Pension salary sacrifice is the standard fix for anyone trapped there.