Can I Have More Than One ISA? – Answered

James Beattie By James Beattie 11 Min Read

The short answer is yes, you can have more than one ISA at one time. But ISAs aren’t the same as savings accounts, so it’s not as simple as that. You can’t just open multiple ISAs and put as much money as you want into all of them each year. There are strict rules you must follow to be in line with the ISA rules.

Quick Overview
There is no limit on the amount of ISAs you can actually open, as long as you only pay into one of each type of ISA during a single financial year. You also cannot go over your ISA Limit for the year. You can only have £20,000 across multiple ISAs even if they are different types of ISA accounts.

Can I Have Multiple ISAs Open at Once?

You can technically have as many ISAs open as you want at once because there is no limit on the number of accounts you can have open. However, this doesn’t mean that you should just open loads of ISAs and spread your money out between them.

First of all, you have to meet the eligibility criteria for each ISA you open. Different finance providers have different eligibility criteria for their various financial products and for ISAs, these could include a minimum deposit or a minimum amount you have to save per month.

You may not be able to meet these for multiple ISAs simply because it would be expensive. Secondly, you are limited on which ISAs you can pay into each financial year and the total amount of money you can put into them.

How Much Can I Pay Into My ISAs Each Year?

You can put up to a certain amount of money into your ISAs each year; the amount changes based on economic factors like inflation. For the 2023-2024 financial year, £20,000 is your tax-free ISA allowance. At the end of the financial year your tax-free allowance resets. Then you can pay up to the limit for the next year into the same ISA, or a different one.

It’s important to note that £20,000 is the total amount you can save in a single year, not the amount you can hold in one ISA – you can split this amount between different ISAs if you wish.

For example, you may want to save towards retirement with a lifetime ISA, but also save money that you can access before you turn 60 in a cash ISA. You’ll have to figure out what works best for you financially. 

How Many ISAs Can I Pay Into?

You can only pay into one of each type of ISA every tax year, so a maximum of 4 ISAs for yourself, depending on eligibility. This is because with an ISA you have a tax-free individual savings allowance. This means that you don’t pay any tax on interest you earn up to a certain amount per year. In order to regulate ISAs, individuals are limited to what they can pay in and where each tax year.

Hypothetically you could pay into one of every type of ISA in order to maximise your savings. For example, if the tax-free allowance for the year is £20,000 and you have a cash ISA that you can deposit up to £10,000 into, you could also put £4,000 in a lifetime ISA and £6,000 in a stocks and shares ISA. Doing this means that you use up the £20,000 tax-free allowance, rather than potentially having to pay tax on the interest you earn from this money.

In order to decide which ISAs are right for you, it’s a good idea to find out how they all work. Here are the different types of ISAs available in the UK:

Cash ISA

A cash ISA is the most simple form of ISA. You open it and pay cash into it. Most major banks and  building societies in the UK offer cash ISAs, but there are different rules for all of them.

Some are fixed for 6 months, a year, 18 months, or even longer. Others let you make a certain number of withdrawals per year. Some even allow you to take cash out whenever you want, so long as you don’t drop below the minimum required balance. However, you are likely to pay for this flexibility with lower interest rates. 

Lifetime ISA

A lifetime ISA allows you to save regularly over decades. It is aimed at people who are either saving to purchase their first home, or who want to put some cash aside for when they retire. You will get a 25% bonus up to £1,000 from the government on your savings each year. But there are strict regulations, such as not being allowed to open one after you are 40 or add money in after you turn 50.

You also can’t access the money before you turn 60, unless you are using it to purchase property. It’s worth thinking carefully about whether a lifetime ISA is right for you. 

Stocks and Shares ISA

A stocks and shares ISA allows you to invest in stocks, funds and more. This is one of the best ways to capitalise on your ISA allowance. As your investments can grow significantly over decades, allowing them to grow tax-free is extremely beneficial.

This type of ISA is best for long-term investment because the value of your investment can go up and down, especially over the first few years. You want to commit to at least 6 years with a stocks and shares ISA, but many people hold them for decades and eventually become ISA millionaires.

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Innovative Finance ISA

An innovative finance ISA basically allows you to participate in peer-to-peer lending without having to pay tax on your savings income from it, up to a certain amount per year. This type of ISA is aimed at investors and is strictly regulated by the Financial Conduct Authority in the UK. You have to be approved by HMRC as an ISA manager in order to get one.

Junior ISA

A junior ISA is an individual savings account for children. It is a great way for parents to save money for when their children grow up and to teach them about finance. Your child must be under 18 and living in the UK full-time, or you must be either a diplomat or part of the armed forces in order to qualify.

The savings limit on a junior ISA is £9,000 per year. If you are thinking of starting a junior ISA for your child or dependant, just remember that you can’t use it to get extra savings for yourself because the money legally belongs to them.

Can I Move Money Between ISAs?

Yes, you can move money between your ISAs. You can transfer your savings to a different type of ISA or the same type of ISA.

If you want to transfer money you’ve invested in an ISA in the current tax year, you must transfer all of it. For money you invested in previous years, you can choose to transfer all or part of your savings.

Note: If you are transferring cash and assets from a Lifetime ISA to a different ISA before the age of 60, you’ll have to pay a withdrawal fee of 25%.

Remember, the tax year runs from the 6th April to the 5th April of the next year, not alongside calendar years. If you put money into your ISA last tax year, you can close that one down and move the money to another one with a better rate.

What To Do If You Pay Into More Than Of The Same Type Of ISA

If you have paid money into more than one of each type of ISA during a single financial year, don’t panic. This mistake does happen. The best thing to do is immediately contact both your ISA providers and HMRC.

They will be able to advise you on the necessary steps you need to take. The sooner you tell them, the more likely it is that they will believe you made an honest mistake.

Final Thoughts

Using an ISA to hold your savings is a great way of taking advantage of your tax-free ISA allowance. It may be beneficial for you to have more than one ISA open at a time. For example, if you want to invest tax free for your future in a Stocks and Shares ISA and also want to save for a house with a Lifetime ISA and benefit from the 25% bonus.

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I'm passionate about personal finance and making money. Currently trying to FIRE solely by building online assets. Grew my stock portfolio to £86,000 by 26.
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