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New rule boosts ISA savings for bereaved partners

The Additional Permitted Subscription allows spouses to enhance their ISA allowance significantly after a partner's death.

July 20, 2025 at 10:04 AM

The obscure rule that lets savers bust their ISA allowance

A little-known rule can enhance a saver's ISA allowance after losing a partner.

Obscure rule allows savers to increase ISA allowance significantly

A little-known rule can help bereaved spouses or civil partners boost their Individual Savings Account allowance significantly after the death of a loved one. The Additional Permitted Subscription (APS) allows them to inherit an extra tax-free allowance equal to the value of the deceased partner's ISAs at the time of death. This means that the annual ISA limit can rise from the standard £20,000 to potentially six figures, depending on the deceased's ISA balance. Claims must be made within three years of death, creating opportunities for meaningful financial relief amidst emotional hardship. Recent data from Hargreaves Lansdown shows a notable increase in APS claims, reflecting growing awareness of this provision.

Key Takeaways

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The Additional Permitted Subscription allows significant ISA allowance increases.

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Surviving spouses can inherit tax-free allowances that exceed usual limits.

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Claims must be made within three years of a partner's death.

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The process can be slow and requires specific documentation.

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Financial advisers highlight growing awareness of APS benefits.

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Hargreaves Lansdown reported a one-third increase in APS claims last year.

"These inherited allowances aren’t always well understood, but can be incredibly valuable."

Sarah Coles from Hargreaves Lansdown emphasizes the importance of understanding APS benefits.

"Claims must be made within three years of your partner’s death."

This rule requires timely action for those eligible to access the additional allowances.

"The APS process can be slow and paperwork-heavy, so acting sooner rather than later is key."

Financial advisers warn that delays can complicate APS claims.

This unique rule may provide vital financial assistance to grieving spouses, particularly during tough economic times. While it presents a significant opportunity, the process can be complex and cumbersome, requiring timely action. Financial advisers emphasize that awareness of APS is critical and that individuals should carefully review their ISA providers, as not all support APS claims. As more people learn about this option, we might see further shifts in how bereaved savers approach their finances.