Stocks & Shares ISA Calculator

How to use this calculator

1. 1Enter your starting amountThe lump sum you're investing into the ISA now, and optionally an amount you'll add each year (up to the £20,000 annual allowance).
2. 2Set your time horizonHow many years you plan to stay invested. ISAs reward long holding periods because the tax saving compounds.
3. 3Set your expected returnA realistic long-run figure for a diversified portfolio is often 5–7% a year. Set how much of that comes from dividends versus share-price growth.
4. 4Pick your tax bandChoose basic or higher/additional rate. This sets the dividend and capital gains tax you'd pay outside an ISA, and therefore the tax you save inside one.
5. 5Compare the outcomesSee your ISA value, the same portfolio's value after tax in a normal account, and the total tax you avoid by using the ISA.

What this ISA calculator shows

It projects two paths side by side: the same portfolio held inside an ISA, and held in an ordinary (general investment) account where dividends are taxed each year and gains are taxed when you sell. The gap between them is your tax saved.

For a modest pot over a few years the difference is small. Over decades, with dividends reinvested, the tax the ISA removes can add up to tens of thousands of pounds — which is why using your ISA allowance consistently is one of the highest-impact decisions a UK investor can make.

How the tax saving is calculated

Outside an ISA there are two taxes at work. Each year, dividends above the small dividend allowance are taxed at your dividend rate (8.75% basic, 33.75% higher). When you eventually sell, the gain above your annual allowance is taxed via capital gains tax (18% or 24%).

Inside an ISA, both of these are zero. The calculator models the annual dividend drag and the final CGT bill on the taxable path, then compares the after-tax result to the tax-free ISA.

Making the most of your ISA

• Use the allowance every year — you can put in up to £20,000 per tax year, and unused allowance doesn't carry forward.
• Reinvest dividends — inside an ISA there's no tax drag, so compounding works at full strength.
• Shelter your highest-yielding and highest-growth holdings first — they generate the most taxable income and gains.
• Consider "bed and ISA" — move existing taxable holdings into the ISA wrapper to protect future gains.

Assumptions and limits

This is an illustration, not a forecast. It assumes a steady annual return and a constant dividend split, which never happens in reality, and it uses 2026/27 tax rates that may change. It doesn't model the dividend allowance, phased selling to use multiple CGT allowances, or your personal circumstances. Always check current rules and consider advice for larger sums.

Frequently asked questions