Can I Open More Than One ISA in a Tax Year?
Clarify UK ISA rules. Learn how to combine different ISA types and manage multiple accounts to optimize your tax-free savings.
An Individual Savings Account (ISA) is a tax-efficient savings and investment vehicle available in the United Kingdom. Funds held within an ISA grow free from UK income tax on interest and dividends, and capital gains tax on investment profits.
The Annual ISA Subscription Limit
Each tax year, individuals are granted an ISA allowance, the maximum amount that can be saved or invested. For the 2025/2026 tax year, this annual subscription limit is £20,000. This allowance resets at the beginning of each tax year, which runs from April 6th to April 5th of the following year. The £20,000 limit applies to the total amount contributed across all ISA types within a single tax year. If the full allowance is not utilized by the end of the tax year, any unused portion cannot be carried forward.
Opening Multiple ISA Types in a Single Tax Year
Recent changes to ISA regulations, effective from April 2024, have provided greater flexibility regarding the number of ISAs that can be opened and contributed to within a single tax year. Previously, individuals were generally restricted to opening and funding only one of each specific type of ISA per tax year. However, it is now possible to open and contribute to multiple ISAs of the same type within a single tax year.
Despite this change, specific rules apply to different ISA types. For instance, while you can open multiple Cash ISAs, Stocks & Shares ISAs, or Innovative Finance ISAs with different providers in the same tax year, you can only pay into one Lifetime ISA per tax year. This allows for diversification of savings or investments across various tax-efficient vehicles.
Types of ISAs
A Cash ISA is designed for cash savings, offering tax-free interest.
A Stocks & Shares ISA enables tax-free investing in assets such as company shares, unit trusts, and investment funds.
The Lifetime ISA (LISA) helps individuals aged 18 to 39 save for their first home or retirement, providing a 25% government bonus on contributions up to £4,000 per tax year.
The Innovative Finance ISA (IFISA) allows tax-free returns from peer-to-peer lending and other alternative finance investments.
Handling Your ISA Accounts
Individuals can hold an unlimited number of ISAs that were opened in previous tax years. The annual subscription limit only applies to new money contributed within the current tax year.
Should you wish to consolidate or move your ISA funds, transferring them between providers or between different types of ISAs is possible without losing the tax-free status. You must follow the official ISA transfer process, initiated by the new ISA provider, to ensure the tax wrapper remains intact. Simply withdrawing money from one ISA and depositing it into another will count against your current year’s allowance, potentially losing tax-efficient savings.
Transfers can be full or partial, although contributions made in the current tax year must be transferred in their entirety. Funds from previous tax years can often be partially transferred. Transferring an ISA does not utilize any part of your annual ISA allowance, as it is simply moving existing tax-efficient savings.