How Many ISA Accounts Can I Have & Pay Into?

Individual Savings Accounts (ISAs) are a specific type of savings and investment vehicle available to residents in the United Kingdom. These accounts are designed to encourage saving by providing a tax-efficient environment. Funds within an ISA grow free from UK income tax, capital gains tax, and dividend tax. This tax-free growth applies to interest earned on cash, as well as profits from investments and any dividends received.

The Core Rule: Number of ISAs and Annual Contributions

The number of Individual Savings Accounts (ISAs) an individual can have and contribute to in a given tax year is governed by specific regulations. For the 2025/2026 tax year, the overall annual ISA allowance is £20,000. This allowance resets with each new tax year, which runs from April 6th to April 5th of the following year. Any unused portion of the allowance from one tax year cannot be carried over to the next.

While you can hold multiple ISAs from previous tax years, the rules primarily concern new contributions within the current tax year. Effective from April 2024, individuals can open and contribute to multiple ISAs of the same type with different providers in a single tax year. For instance, you could contribute to a Cash ISA with one bank and another Cash ISA with a different bank, provided the total amount across all new contributions does not exceed the £20,000 annual allowance. The primary exception to this flexibility is the Lifetime ISA, where you can only open and contribute to one per tax year.

Exceeding the annual ISA allowance has consequences, as any contributions over the £20,000 limit will not receive tax relief. If an individual accidentally oversubscribes, HM Revenue & Customs (HMRC) will contact them to explain the necessary corrective actions. This often involves removing the excess funds and any associated gains from the ISA, and tax relief on these oversubscribed amounts will be lost.

Understanding Different ISA Types

There are generally four main types of adult ISAs, alongside a dedicated option for children. These types include Cash ISAs, Stocks & Shares ISAs, Innovative Finance ISAs, and Lifetime ISAs, with Junior ISAs available for those under 18. Each type allows for tax-efficient savings or investments tailored to different financial goals.

A Cash ISA functions much like a traditional savings account, where interest earned on deposits is tax-free. These can offer variable or fixed interest rates, with some providing easy access to funds while others may have withdrawal restrictions. In contrast, a Stocks & Shares ISA allows individuals to invest in the stock market through various assets like company shares, unit trusts, investment funds, or corporate and government bonds. Any profits from these investments are exempt from capital gains tax and UK income tax.

The Innovative Finance ISA (IFISA) is designed for more specialized investments, such as peer-to-peer loans or crowdfunding debentures. This type of ISA involves lending money to individuals or businesses for a return, often appealing to more experienced investors. The Lifetime ISA (LISA) is aimed at helping individuals save for their first home or for retirement. A LISA allows contributions of up to £4,000 per tax year, with the government adding a 25% bonus to these contributions, up to a maximum of £1,000 annually. For those under 18, a Junior ISA (JISA) provides a tax-free savings vehicle, with an allowance of £9,000 for the 2025/2026 tax year.

Managing Contributions Across Multiple ISA Types

Individuals have the flexibility to allocate their annual ISA allowance across different types of ISAs within the same tax year. The total amount contributed across all new ISAs, regardless of type, must not exceed the overall £20,000 annual limit. For example, a saver could place £5,000 into a Cash ISA, £4,000 into a Lifetime ISA, and the remaining £11,000 into a Stocks & Shares ISA. This comprehensive allowance allows for diversified saving strategies based on individual financial objectives.

While the £20,000 allowance is overarching, the Lifetime ISA has its own specific contribution limit of £4,000 per tax year. This £4,000 still counts towards the overall £20,000 annual ISA limit. Therefore, if the maximum £4,000 is contributed to a Lifetime ISA, the remaining allowance for other ISA types would be £16,000.

The ability to contribute to multiple ISAs of the same type, such as opening several Cash ISAs with different providers, provides greater flexibility in managing funds. This can be advantageous for seeking out the best interest rates or investment opportunities across various financial institutions. However, it remains the individual’s responsibility to track all contributions to ensure the aggregate amount across all accounts does not exceed the annual allowance.

Transferring Existing ISA Funds

Transferring existing ISA funds involves moving money from one ISA to another, either with the same provider or a different one, or even to a different type of ISA. A properly executed ISA transfer does not count towards the current tax year’s annual ISA allowance. This means that funds accumulated in ISAs from previous tax years can be moved without impacting the £20,000 allowance available for new contributions in the current year.

It is important to follow the correct transfer procedure, which involves contacting the new ISA provider and completing an ISA transfer form. Individuals should never withdraw money from an ISA and then re-deposit it into another, as this action would cause the funds to lose their tax-free status and count as a new contribution towards the current year’s allowance. If funds are withdrawn and then re-deposited, they would be subject to the annual allowance limit, potentially leading to oversubscription if the limit has already been used.

Since April 2024, it is possible to make partial transfers of funds contributed in the current tax year. For funds from previous tax years, both full and partial transfers are permitted. Transfers between different ISA types, such as from a Cash ISA to a Stocks & Shares ISA, are also allowed. While transfers are straightforward, some providers may have specific restrictions or charges, so it is advisable to check with them directly.