How many ISAs can you have?

A shake-up to ISA rules has given savers and investors more flexibility with the tax wrapper. But, how many ISAs can you have in the tax year 2024/25?

Up until 6 April, ISA savers and investors could only put money into one cash ISA and one stocks and shares ISA each during a tax year.

There are now new rules that let you open more than one of the same type of ISA during a tax year, as first announced by former Chancellor Jeremy Hunt in his Spring Budget during March 2024.

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The changes, which kicked in from the new tax year in April,  mean savers who hold a cash ISA or stocks and shares ISA can subscribe to more than one of the same type within a given tax year – but there’s a catch. 

The change is not mandatory and many major savings providers are not ready for the reforms.

So, it’s essentially up to your ISA provider if they want to implement the new rule. In previous tax years, savers could only hold one new ISA of the same type. 

In the midst of other ISA changes that came in at the start of this tax year, this one could prove beneficial for thousands of cash ISA holders, as it means just like a traditional savings account, savers can keep on top of bagging competitive rates without the hassle of transferring funds. And it means investors can shop around for the best investment platform to host their stocks and shares ISA. 

We dive into how the new rule works, and which banks and ISA providers have welcomed the new ISA rule. 

How many ISAs can I open in a year?

Before the 2024/25 tax year, ISA holders were only permitted to open one new ISA of the same type within a given tax year. 

If you wanted to switch over to another ISA of the same type, previously you would have had to check if your current provider would allow your funds to be transferred to the new provider – and not all ISA providers offer this. 

But, since 6 April, those who hold a cash ISA or stocks and shares ISA can subscribe to more than one in a tax year. 

Plus, there will also be a change to ISA transfers. Before 6 April, if you wanted to transfer your funds to another ISA, it would have had to be the full amount. Since the new tax year began, you can now partly transfer funds. But, you will have to check that your provider offers this. 

Whilst your £20,000 tax-free allowance remains the same, you can spread it across various ISAs providers and accounts of the same type within your limit. 

Which banks are allowing customers to take up multiple cash ISAs? 

As mentioned, it’s up to the ISA provider whether they want to take on the new ISA reforms and offer it to its customers. 

While providers have had under six months to prepare for the new ISA changes, it's expected that many will have not implemented the new rules yet. 

MoneyWeek asked the big high-street banks whether they are accepting applications from ISA holders who already hold a cash ISA elsewhere, or with them.  

So, currently only TSB, Nationwide Building Society, SBS and YBS are taking on the new ISA reform. It means between these four providers, you can open multiple ISAs of the same type. 

For example, if you have a fixed cash ISA with Nationwide, but months later you see TSB is offering a better rate, you can open a cash ISA with TSB without having to close or transfer the funds from your Nationwide account. 

Most other high-street banks said they are still reviewing the new ISA rules, and customers could expect changes soon. 

But almost halfway into the current tax year, Barclays, HSBC, Lloyds, NatWest and Santander are still telling customers that they can only have one type of each ISA.

While these are the big players in the ISA market, they are known for their poor rates compared to smaller savings providers. Currently, you can earn up to 5.12% in a cash ISA with Chip, whereas an average cash ISA with a high-street bank stands around the 4% mark. 

The good news is, some small providers are open to applications from customers who already hold the same type of ISA. 

Investment firm Hargreaves Lansdown (HL) launched the first and only cash ISA platform in February, under its Active Savings platform. The platform acts as a one-stop shop for savers to take advantage of competitive rates, without the hassle of always switching.

HL offers three types of cash ISAs on its platform- easy-access ISAs, fixed ISAs and limited-access ISAs, and under the new rules, it allows savers to hold more than one cash ISA per tax year. 

Some providers on its platform don’t accept customers who already hold a cash ISA in the same tax year if you go directly to them, but if you go via the HL savings platform, you can take advantage of the new ISA rule. Currently, the platform hosts five ISA providers, including big and small players such as Zopa, OakNorth Bank and Santander. 

Savings and investment app Moneybox has also confirmed it has taken the new ISA rule on board. 

Which investment firms are taking the new rule on board for stocks and shares ISAs? 

The ISA change also applies to stocks and shares ISAs, but which fund supermarkets have welcomed the new ISA rule? 

HL told MoneyWeek: “In line with the changes to the ISA rules implemented from 6 April, clients can open/contribute to a stocks and shares ISA with HL and an alternative provider in the same tax year.”

Investment firm Interactive Investor said under the new rules, you can open and contribute to stocks and shares ISAs with other providers in the same tax year too. 

AJ Bell has also confirmed that it is allowing subscriptions to multiple ISAs.

A spokesperson from Fidelity told MoneyWeek: “In order to ensure clients continue to have the widest possible choice, Fidelity has removed the requirement that ISA account holders only contribute to a single stocks and shares ISA within a tax year.”

The reason for shifting your investments to another stocks and shares ISA might be down to the funds on offer, but it will be more down to customer experience, says Brian Byrnes, head of personal finance at Moneybox. 

He said the move should encourage ISA holders to shop around and look at the providers' different features and low platform costs. 

Is now a good time to open an ISA? 

It is never too late to start saving or investing.

f you’re looking to open a stocks and shares ISA, data by HL shows early bird investors are better off, although you can usually still make money over the long-term whenever you begin.

The research by the investment firm shows if you invested your full ISA allowance in the Legal & General International Index fund on the first day of each tax year for the past 10 years, you would have received a return of £360,500 – £38,000 more than if you invested on the last day of the tax year. 

Myron Jobson, senior personal finance analyst at interactive investor, reiterates this: “Countless research shows that the early bird gets the worm. Investing early allows your investments more time in the market to potentially grow over the course of the year, benefiting from compounding returns.”

It’s also a good time to open a cash ISA right now, especially if you're fixing for a year or two. This is down to savers still raking in high returns from the 5% base rate – but as interest rates are cut, top savings deals could also disappear.

So, there’s no better time to take advantage of a cash ISA. If you’re looking for flexibility, the top cash ISA is offering 5.01 % from Chip, followed by 5% from Trading 212.

If you’re prepared to fix your cash, you can earn just below 5%. Currently, Charter Savings Bank is returning 4.67% on its one-year fixed ISA, with a minimum deposit of £5,000. Kent Reliance is offering 4.63%, and you can open the ISA with £1,000. 

Right now it might seem like the rate on an easy-access cash ISA is offering a more attractive rate, but if the base rate does fall, the return on a fixed ISA won’t change within the term you’ve fixed for. So, in the longer term, you could be setting yourself up for a better return.