How many ISAs can I have? New rules explained

so one of the biggest confusions when it comes to Isis is how many can you have well the good news is in the new Financial Year from 6th through April 2024 the rules are changing and it's going to be so much easier and get rid of most of that confusion I take you through uh kind of what you need to know and answering some of your kind of big questions that I've had around this issue so first of all let's quickly talk about the old rules that will be running up until that date and these were very kind of strict in lots of ways you could only put new money every single Financial year into one of each type of Isa so there are four isers within this cash Isa the stocks and shares Isa the lifetime Isa and the Innovative Finance Isa you can only pay in one cash Isa one stocks and shares Isa One inovative Finance Isa one lifetime Isa now you could do all four of them or you do three of them two of them or just one of them but you couldn't have two cash ises three stocks and shares ises whatever it might be one of each type in terms of new contributions there's also the junior Isa which has its own uh separate allowance but again only one Junior Isa in each Financial year it's important to say as well that within that the lifetime Isa and the junior Isa there are stocks and shares and cash versions of each but that would still be just one lifetime Isa cash or stocks of shares not one cash lifetime Isa One stock of shares Life Time Isa and the same for junior Isa so they're the rules as they have been and this is what is changing this is the big big big big change when it comes to Isis you are going to be able to have as many as you want of the cash Isa the stocks of shares Isa and the Innovative Finance Isa so if you want to have eight different cash isers some of them easy access and a number of different fixes or whatever it might be that is fine if you want three stocks and shares two cash one ative finance that is fine you can do as many as you want in terms of those new contributions in a financial year and why you might want to do that well we'll come back to that in a moment however what's not changing are those restrictions on the lifetime Isa and the junior Isa they are still going to be locked down to just one of those in each year in terms of new money yes if you want to change that during a year and long as the new provider allows it you could open up a new one fully transfer all the money already contributed in that Financial year to that different provider and then pay money into that different one but you certainly can add money to two different ones in the same time if you don't do that transfer for those particular item but for the rest there's no need to transfer money across partially or fully you can if you want to but you don't need to you can literally say all right you what I'm not going to use that one anymore I'm going to keep it sitting there I'm going to open this one over here if I want to absolutely fine no problem at all and this extends as well uh in terms of a single provider pry quite nice quite convenient wouldn't it in some ways to have all of your ises with the same uh bank or be on society or platform whatever it might be and as long as that provider allows this then you can do that but this is not a requirement so you may well find that you have got a fix cash Isa with One bank and you think this is is gray but I want to now put some in easy access later on they don't have to let you have another account with them so you might have to shop around although that's no bad thing yes you got the inconvenience having two apps rather than one but if you can get a better rate elsewhere that's probably going to be a benefit the other thing to say about this is because these rules are so new it might be that the lenders haven't necessarily got around yet so S Building societies and Banks haven't necessarily got around yet to making this possible they might still have infrastructure and systems in place that make it a bit difficult so it might be a while yet before some of the places do let you have multiple ises for new contributions in the same Financial year so want to keep an eye on there there is an older type of Isa called a portfolio Isa Nationwide for example offered this uh where you could open up a single Isa and then within that Isa that cash Isa you could have summon fixes summon easy access things like that it could be that some places continue to provide it in that way or even some place might start to do it or you might see those ones phased out completely and it's just a do your an Isa what type of is do you want and you just apply for it and you've got it and you add the money as it goes along now what's really important we to remember here is that uh there is the annual iser allowance so the big question that often comes along when you're talking about multiple ises particularly now if you're able to have a number of different ones in the same year is can you then add £20,000 which is the annual I allowance to each of those ises could you have three Cash ises all of them this is if you got a lot of money with 20K in each of them sadly the answer is no that 20 ,000 allowance that is not changing that is still Collective across the cash Isa the stocks and shares Isa the Innovative Finance Isa and the lifetime Isa that £2,000 is mixed up it could be in one or it could be in a combo with them but you cannot put more than that in there now previously the old rules would have made it very difficult to do that because the bank of beond society would have been monitoring this and they would have been informing uh the treasury hmrc and letting them know and maybe you that would have been kind of you as you went along you would have known you've over subscribed they call it too much money in a year if you are going to be putting money into different Isis from different providers then they're not going to know so you has much more responsibility on you now to make sure you don't go over that combined 20,000 limit couple of caveats I want to share with you here though obviously uh the lifetime Isa has its own separate 4,000 limit as we suggested just worth reminding you of that so if you do put 44,000 in that just leaves £16,000 collectively across those different isers and the junior is again has its own separate £99,000 allowance there as well so spoken here a lot about new Isis new money you're adding in the financial year within that 20,000 allowance but of course for many of us we've had Isis from previous years as well and that's often had a bit of confusion because people were thinking would I've already got an Isa from a previous year then I can't open a new one because I'm only allowed to have one Isa well obviously that wasn't the case in the past and it's certainly not the case now if you have got Isis from previous years once the money is in there they can contain within that kind of Isa tax-free protection you don't need to be uh taking money out or moving it around you might want to transfer it across via the transfer process in order to get better rates or if it's investment to get lower fees but it doesn't matter you can have any number of you want in the past and now you can add to them potentially even more ises as the years go on for that new contributions you can add money to older ises if you want you don't have to open a new Isis to add cash in uh for cash Isis themselves that's probably not the best thing because say rates would have changed but for investment isers it may well be you've got a portfolio working on you want to keep using that one and keep adding money to those old ones L alone not Bing to open up a new one or you might want to keep some money in that old stocks and shares Isa because you like what's going on there you don't want to have to withdraw stuff and sell it all off and transfer it which could come with a cost but you want to keep contributing but you also want to open up a new one and add money to that one again you can add money to both new and old ones if you wish this leads on to the question now is should you have more than one Isa you know just because you can should you because there is something to be said about that Simplicity of just having a single cash Isa or a single stocks and shares Isa if you wish and there are lots of benefits to that um but I certainly would be when it comes to cash isers be seeing this as an opportunity to have more flexibility within your savings so if you are in a position to lock some but not all your money away this does mean you can do that you know a year ago I put my money open up my Isa I put it into a fit and that would mean that if I had more money later on that I wanted to add I couldn't add it in because a fixed account only had a small window where you could add more money so that would obviously rule you out if I wanted to do that in the end I actually money I had left over I put it into an investment Isa but now if you want to you can safely put money at the start of year in a fix and later on towards the end of the financial year if you've got more money you want to put aside you aren't rolled out you can put it back into a cash is it if you want so that's a really good thing to be considering there as well um also think about if you have using Isis for a long time now but have been around for decades that they're going to be getting bigger and bigger and bigger more and more money in them plus the growth rather from the Investments or the interest from the savings more and more and more when you get to that £85,000 limit that's when the financial services compensation scheme protection caps out so if something was to go wrong the institution was to fail then you'd only be protected up to 85k so then it's worth thinking about actually having your money in more than one Isa at different providers and not at the same provider just to sort of spread out that risk so you are protected for all your money rather than having too much in there and only getting some of it back if something goes wrong so again certainly have a reason to think about having more than one iser if you want to and just going back well just reiterating here if you have got older isers which have got uh money in them fixes that are finished for example or rates often when you open up a new iser new cash iser the first year there's like an extra bonus you've seen a lot of that recently after a year obviously that means your rate going to drop a lot there's no point keeping these older IES with low rates just because you can have lots of IES I certainly would be thinking there actually about consolidating obviously bearing in mind that 85,000 total in terms of prediction but consolidating them and moving them across you could transfer more than one Isa into a new Isa if you want to to get a better rate so again you've got that choice now you've got that flexibility you can add new money in to more than one Isa in a year if you wish to you can transfer money into more than one Isa if you wish to you can have many older Isis if you want to and that's what's so great about these rules my name is Andy Webb this is Be Clever withy your.com check out these videos here for more ways to make the most of your Isa

Channel: Be Clever With Your Cash

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Keywords: what are the new ISA rules?, new ISA rules explained, are there new ISA rules, can I have more than one ISA, ISAs explained, How many Isas can I have, multiple lifetime isa, how many new isas can i pay into

Id: 3BVYgZrC3hM

Length: 9min 53sec (593 seconds)

Published: Sun Mar 31 2024