When it comes to ISAs (Individual Savings Accounts), the rule used to be that you could only pay into one of each ISA type every tax year – although there wasn't a limit on the number you could actually have.
This means that you could open and pay into a Stocks and Shares ISA during one tax year, then open another one that you pay into over the next tax year instead. You, however, wouldn't have been able to contribute to both in the same tax year.
But the ISA rules changed from 6th April 2024, and you can now open and pay into as many ISAs as you want each tax year – even if they're the same type (although this doesn't apply to Lifetime ISAs, as the rules haven't changed for those).
And just FYI, these are the 4 types of ISA available for adults:
- Cash ISA
- Stocks and Shares ISA
- Lifetime ISA
- Innovative Finance ISA
Your children can also have Junior ISAs (as long as they’re under 18) which could be a Cash or Stocks and Shares ISA. However, as these belong to the child, they aren’t included in the number of ISAs you hold.
How many ISAs can I have?
Technically, you can open and pay into as many ISAs as you want during a tax year, and you can have a few of each different type (though the rule is different for Lifetime ISAs). So, to answer your questions:
- How many Cash ISAs can I have? You can open and pay into as many as you want each tax year and hold onto (and continue to pay into) any you already have.
- How many Innovative Finance ISAs can I have? It’s the same for an IFISA (so, as many as you like).
- How many Lifetime ISAs can I have? You can open one new LISA each tax year while keeping your old LISAs, but you'll only be able to pay into one during a single tax year.
- How Many Stocks and Shares ISAs can I have? The same rules apply as for Cash ISAs and IFISAs – meaning you can have as many S&S ISAs as you want.
There’s no limit to the number of ISAs you can hold – only the amount you can pay into these ISAs.
How much can you pay into an ISA each year?
The current ISA allowance is £20,000 but this is subject to change each tax year.
This allowance is for all your ISAs, not per ISA. So, if you had one of each type of ISA (as an example), your £20,000 would be spread across all four. The same rule applies if you hold multiple of the same type of ISAs.
Basically, you can choose to split this however you want, the only restriction being the Lifetime ISA allowance, which can only be £4,000 of your £20,000 limit.
Something we do at Wealthify is offer different risk levels and investment themes for our Stocks and Shares ISA (which impact how your money is invested). So, you can open multiple ISA Plans with us (all with different levels of risk and investment themes), though these Plans will be contained in one Stocks and Shares ISA.
This makes it easier to try different risk levels or investment themes if you wanted to, depending on your suitability.
What’s the benefit of having more than one ISA?
Having multiple ISAs allows you to diversify your savings and spread risk. For example, holding both a Cash ISA and a Stocks and Shares ISAs gives you the benefits of saving and investing.
Each ISA has features that could be more suitable for different goals. For example, a Lifetime ISA can only be used to buy a house or help with retirement costs, a Cash ISAs can be easily accessed and are very low risk. Stocks and Shares ISAs could help you reach long-term financial goals, while innovative finance ISAs allow you to invest in opportunities like peer-to-peer lending in a tax-efficient way.
Can I keep paying into the same ISA?
Yes. You don’t have to open a new ISA each tax year even if you max out your allowance. This allowance refreshes so you can continue saving or investing in the same account. Any money already in the account will remain tax-free.
You can also transfer your ISA to another provider if you wanted to have all your money in one place. You’ll need to ask for an ISA transfer form, otherwise, you may lose out on the tax-free benefits.
Wealthify does not offer advice, if you’re not sure whether investing is right for you, then please speak to a financial adviser.
With investing your capital is at risk, so the value of your investments can go down as well as up, which means you could get back less than you initially invested.
Your tax treatment will depend on your individual circumstances and it may be subject to change in the future.
