From April 2024 you can now pay into more than one type of each ISA in the same tax year. The changes mean it is easier for you to take advantage of better interest rates and deals as they come up, and the ISA landscape should be easier to navigate.
In this article, we’ll run through the main types of ISAs and how many you can have.
ISA types
There are five types of ISA.
Cash
Cash ISAs offer a set interest rate and are generally suited to short-term saving or those uncomfortable with taking any risk on their money. There are several types of cash ISA including easy-access, fixed rate or notice savings accounts.
Stocks and shares
A stocks and shares ISA — also known as an investment ISA — allows you to invest your savings in a wide range of assets such as stocks, bonds, funds.
Innovative Finance
Innovative Finance ISAs are generally suited to investors willing to take a high level of risk on their savings. Through an Innovative Finance ISA, you loan money to businesses or individuals, with the interest they pay on the loan providing you a return on your investment. Open-ended property funds can also now be added to innovative Finance ISAs in the 2024/25 tax year.
Lifetime ISA
A Lifetime ISA is primarily aimed at first-time buyers aged under 40, but you can also save into one for retirement. You can access money in a lifetime ISA either when you buy a home or from the age of 60.
Junior ISA
A Junior ISA is for children under the age of 18. Parents open an account but anyone can pay into it. The child gets access to money in the account from age 18.
How many ISAs can you have?
There is nothing to stop you having several ISAs. You can have as many ISAs as you like.
However, the maximum you can pay into all adult types is £20,000 per tax year. This includes the Lifetime ISA, where a maximum of £4,000 can be paid in each year.
So, for example, you could pay £10,000 into a cash ISA, £6,000 into a stocks and shares ISA and £4,000 into a Lifetime ISA — totalling £20,000.
The annual ISA allowance is £20,000 per person, so if you are married or have a partner and you share finances, then your allowance per couple or per household is £40,000.
Junior ISAs do not count as part of the adult ISA allowance. So if you have a child and want to pay into a Junior ISA for them, you have an additional allowance of £9,000 a year that can be paid into a Junior ISA.
How many ISAs can you have of each type?
In the 2024/25 tax year it is now possible to pay into several types of adult ISA in the same tax year.
Previously, you could only pay into one type of ISA each year — for example, one stocks and shares ISA or one cash ISA. This caught some people out, as it’s easy to open ISAs and not always easy to keep track of when you paid into it.
As of 6 April 2024, you can open and pay into multiple types of ISAs. For example, with a cash ISA you could open and pay into ones offered by two different providers — perhaps if you are looking for the best interest rate on an easy-access and fixed-rate deal but the same provider doesn’t offer both.
Similarly if you have a stocks and shares ISA, you can now open or pay into several investment ISAs from different providers.
You may want to do this if one provider doesn’t offer all the investments you want, or if you want lower fees on certain types of investments. For example, Freetrade and Trading212 offer commission-free share dealing but not index funds (also called mutual funds).
So if you want a combination of shares, ETFs and mutual funds, it is now possible to pay into several ISAs from different providers to get the best fees or wider investment choice.
The benefit of investing or saving through an ISA is that all returns and growth are tax-free, so you won’t have to worry about capital gains tax or income tax.
We explain more here about the basics of investing for those who are just getting started.
How many Junior ISAs can you have?
A child can have two Junior ISAs — one cash Junior ISA and one investment Junior ISA. A total of £9,000 can be paid into the child’s Junior ISAs each tax year.
You may want to split the allowance between the two types, or just select one type of ISA. Financial advisers generally recommend you consider a stocks and shares Junior ISA if your child is young and there are plenty of years before the money intends to be withdrawn.
The new flexible adult ISA rules don’t apply to Junior ISAs. A child can only hold one type of cash ISA or one type of stocks and shares ISA at any one time, which means you can’t pay into multiple Junior ISAs in 2024/25.
Can I pay into multiple Lifetime ISAs?
Unfortunately the new flexible ISA rules do not apply to lifetime ISAs. You cannot open or pay into multiple Lifetime ISAs in a single tax year.
However, you can hold several Lifetime ISAs with different providers. But you only pay into one Lifetime ISA each tax year.
What about partial transfers?
From 6 April 2024 it is now easier to transfer ISA savings from one provider to another.
You can now make partial transfers across a tax year. For example, if you contributed £15,000 to an ISA but later want to transfer £7,000 of that to another provider, it is now possible to do so. Previously, you’d have had to transfer all of the £15,000 paid in that tax year.
However, be aware that not all providers accept partial transfers — and not all accounts will accept transfers. Check with your chosen provider what they offer in terms of transfers.
Final thoughts
You can have as many ISAs as you like, as long as you don’t pay in above the total £20,000 individual annual limit.
As of 6 April 2024 it is now possible to pay into multiple ISA types across the same tax year.
However, this new flexibility does not apply to Junior ISAs or Lifetime ISAs. You can still only pay into one Lifetime ISA and one type of Junior ISA (one investment account and one cash account).
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