An Individual Savings Account (ISA) lets you save and invest tax-free, with an annual allowance of £20,000 per person. But how many ISAs can you have, and how does the allowance work? Here’s what you need to know.
| How many ISAs can I open in a year? | As of April 2024 there is no limit on the number of ISAs you can open in a year |
| Can you have more than one ISA? | There is no limit as to how many ISAs you can have |
| How many ISAs can you pay into in a year? | You can pay into as many as you like, as long as you stay within the £20,000 total annual allowance |
| Can I transfer ISA funds invested in previous tax years? | Yes, you can transfer part or all of your savings |
The different types of ISA
There are four main adult ISAs you can open in your own name:
- Cash ISA – Typically pays interest on your savings.
- Stocks and Shares ISA (also known as an Investment ISA) – Invest in equities, funds, bonds, etc.
- Lifetime ISA (LISA) – Helps you save for your first home or retirement.
- Innovative Finance ISA (IFISA) – Often involves peer-to-peer lending or other alternative finance.
Junior ISA (JISA)
There is also a Junior ISA for anyone under 18 who is a UK resident. A JISA has its own annual allowance of £9,000, which does not affect the £20,000 adult ISA limit. If you’re aged 16 or 17, you can still open a Junior ISA. Once you turn 18, it will automatically convert into an adult ISA.
Transferring money from one ISA to another
If you have multiple ISAs from previous years—or you’d like to switch providers—you can now transfer them more flexibly:
- Partial transfers are allowed, whether the contributions were made in the current tax year or in previous years.
- You can transfer any portion of your funds to another provider and still keep the original account open.
- Always use the official ISA transfer process offered by your new provider to maintain your tax-free status.
When it comes to Lifetime ISAs, keep in mind that transferring money out of a LISA to a different ISA type (or closing it) before you’re 60 and not buying a first home generally incurs a 25% government withdrawal charge. Also, if you withdraw ISA funds on your own and try to re-deposit them without using the official transfer process, you risk losing the tax protection on that amount if you’ve already reached your £20,000 contribution limit.
Transferring or consolidating your ISA with Moneyfarm
At Moneyfarm, we generally recommend consolidating your ISAs rather than spreading them across multiple providers. While it can be tempting to hedge your bets, if your current provider isn’t offering the performance or service you need, switching your entire ISA to Moneyfarm can be more efficient. However, you can also transfer part of your ISA, especially if it’s from a previous tax year.
Making the most of your ISA allowance
You can’t exceed £20,000 across all the ISAs you open or pay into during a single tax year (with £4,000 of that allowed for the LISA if you choose to fund one). With the ability to open multiple ISAs of the same type, consider these points:
- Cash ISAs typically offer more stability but often have lower returns.
- Stocks and Shares ISAs can provide higher growth potential but carry more risk.
- Lifetime ISAs give you a 25% bonus toward retirement or a first home but have withdrawal restrictions.
- Innovative Finance ISAs can offer alternative investments but may be less liquid.
Be strategic about splitting your allowance to suit your goals—whether that’s maximising interest rates, investing for growth, or saving for a first home.
Seek professional advice
While the new flexibility allows you to open multiple ISAs in the same year, managing them effectively is key. If you’re unsure how to optimise your tax-free savings, it’s wise to seek guidance from a qualified financial adviser. Remember, investments can go down as well as up, and you should always choose products authorised and regulated by the Financial Conduct Authority (FCA).
FAQ
Who can open an ISA?
Any UK resident aged 18 or over can open an adult ISA, as can Crown employees working abroad (and their spouses or civil partners). If you’re under 18, you can open a Junior ISA.
Can you have more than one ISA of the same type in the same year?
Yes. From April 2024 onwards, you can open and pay into multiple ISAs of the same type in the same tax year, as long as your total contributions don’t exceed the annual allowance of £20,000.
How many ISAs can I open a year?
There’s now no limit to the number of ISAs you can open in one tax year. You could open several Cash ISAs, multiple Stocks and Shares ISAs, and so on—but remember, the maximum overall you can contribute is £20,000.
Can I pay into more than one Lifetime ISA?
You can open multiple LISAs over different years if you wish, but you can only fund one LISA in any single tax year, up to £4,000. This amount counts towards your overall £20,000 annual ISA allowance.
Can I have more than one Cash ISA?
Absolutely. You can now hold multiple Cash ISAs even within the same tax year, which can be helpful if you want to find the best interest rates or keep your cash spread across different providers.
What happens to ISAs from previous years?
They remain open unless you choose to close them or transfer the funds. You can also continue to contribute to old ISAs if it suits your strategy—just stay within the £20,000 yearly allowance.
Can I transfer money between ISAs?
Yes. Partial transfers are now permitted for current-year and previous-year contributions. That means you can transfer just a portion of your ISA balance, leaving the rest behind if you prefer. Always use your new provider’s official transfer process.
Sources: https://www.moneyhelper.org.uk/en/blog/savings/understanding-the-new-ISA-rules
*As with all investing, financial instruments involve inherent risks, including loss of capital, market fluctuations and liquidity risk. Past performance is no guarantee of future results. It is important to consider your risk tolerance and investment objectives before proceeding.
