Multiple ISAs in One Tax Year: The Rules Most People Get Wrong

A significant ISA rule change took effect on 6 April 2024, but a lot of savers - and even some bank staff - are still working from the old rules. Getting this wrong doesn’t usually cost you money, but it can mean missing out on genuinely useful flexibility. Here’s what’s actually allowed.

The old rule (pre-April 2024)

Before 6 April 2024, you could only pay into one ISA of each type per tax year - one Cash ISA, one Stocks & Shares ISA, and so on. If you’d already paid into a Cash ISA with one provider, you couldn’t also pay into a different Cash ISA with another provider in the same tax year, even if you stayed within your overall £20,000 allowance.

The new rule, since 6 April 2024

You can now open and pay into multiple ISAs of the same type in the same tax year - for example, two, three, or more separate Cash ISAs with different providers - as long as your total contributions across all of them don’t exceed the £20,000 annual allowance. This applies to Cash ISAs, Stocks & Shares ISAs, and Innovative Finance ISAs.

The two exceptions: Lifetime ISAs and Junior ISAs

• Lifetime ISA: you can still only pay into one LISA per tax year, capped at £4,000 (which counts toward your overall £20,000 limit). This wasn’t included in the 2024 changes.
• Junior ISA: a child can hold one Junior Cash ISA and one Junior Stocks & Shares ISA at a time - but not multiple of the same type - sharing a combined £9,000 annual allowance across both (see our dedicated Junior ISA article).

Why this flexibility is genuinely useful

• Chasing the best rate without transferring everything. You can open a new Cash ISA with a better rate while leaving an existing one where it is, rather than having to fully transfer or stick with a rate that’s fallen behind the market - though it’s worth first checking whether a Cash ISA is actually the better home for that money than an easy-access account, since that depends on your tax band.
• Splitting money across specialist providers. For Stocks & Shares ISAs, this makes it easier to use one platform for a low-cost, broad index fund portfolio and another for individual share dealing, without needing to consolidate everything with a single provider.
• Testing a new provider before committing fully - you can open a second ISA with a new platform and use it alongside your existing one, rather than making an all-or-nothing switch.

What still trips people up

• Not every provider allows it. The rule change gives you the legal right to hold multiple ISAs of the same type, but individual providers can still set their own limits on how many accounts you can hold with them specifically - always check before assuming.
• The overall £20,000 limit is unchanged and easy to lose track of across multiple accounts. If you’re actively using several ISAs, keep a simple running total across all of them - providers don’t automatically coordinate with each other to stop you exceeding the combined limit.
• Transfers are a separate mechanism from new contributions. Moving money from a previous tax year’s ISA to a new provider via an official transfer doesn’t use up your current year’s allowance - but withdrawing the money yourself and redepositing it does count as a fresh contribution, and can break the ISA’s tax-free wrapper if not done correctly.

Other related changes from April 2024, while we’re on the topic

• Partial transfers between ISA providers are now allowed, regardless of when the money was originally paid in - previously, you had to transfer an entire tax year’s contributions or none at all.
• No need to reapply each year for an existing ISA you haven’t paid into recently - if you want to start contributing again, you generally don’t need a fresh application.
• The minimum age for a Cash ISA rose from 16 to 18, bringing it in line with other adult ISA types (Junior ISAs remain available for under-18s).

The bottom line

If you assumed you could only hold one Cash ISA or one Stocks & Shares ISA at a time, that hasn’t been true since April 2024 - you can now spread your allowance across as many ISAs of the same type as you like, provided you stay within the combined £20,000 limit and check each provider’s own account rules.