ISAs (Individual Savings Accounts) still let you earn interest without paying any tax and allow you to save up to £20,000 each tax year. But several changes came into force from 6 April 2024, here’s what you need to know.   

You can now open multiple ISA accounts

There are different types of ISA, including:

• cash ISA – that pays interest, and
• stocks and shares ISA – a type of investment.   
• Innovative finance ISA - these include more long-term, less liquid investments such as peer-to-peer loans, alternative finance arrangements and cash.

Before April 2024, you couldn’t open two ISAs of the same type in the same tax year. You needed to close one to open another, for example to get a better interest rate.

But now you can open and pay into as many ISAs of the same type as you like, as long as you don’t pay in more than the total ISA limit of £20,000 a year. 

This means you could open a cash ISA with one provider and then another elsewhere – helpful if you want to find the best interest rate or want to spread your cash to keep it safe. 

You do not pay tax on interest on cash in an ISA income or capital gains from investments in an ISA. If you complete a tax return, you do not need to declare any ISA interest, income or capital gains on it.

One Lifetime ISA (LISA) per tax year

A lifetime ISA or LISA is a type of ISA where the government gives you a bonus of 25%. While you can save a total of £20k per year in any ISA account or combination of ISA products you can only pay into one Lifetime ISA in a tax year and the maximum you can pay in is £4,000 (which will leave you free to save or invest £16k in any other ISA product that financial year). See our guidance on Lifetime ISAs for more information. 

You can now make partial transfers

The new rules mean you'll be able to transfer a partial amount from one ISA provider to another, no matter when the money was paid in. Before the change you had to transfer your entire ISA of that type from the current tax year or nothing at all. You will also be able to keep any remaining funds with your existing provider and retain that account. If you want to change providers, we outline all the rules in our guide Cash ISA transfers – the rules.

Minimum age raised from 16 to 18

The minimum opening age for adult cash ISAs is now 18 years old. This change will bring the product in line with the minimum age requirement for other types of adult ISA.

Don’t worry, if you're aged between 16 and 17, you can continue to open and save into a Junior ISA. The downside is that the annual tax-free allowance is £9,000 – less than half the adult ISA allowance of £20,000. 

There is no minimum age limit to open a Junior ISA and when you turn 18 the account will automatically roll over into an adult ISA. If you’re thinking about opening a Junior ISA, we outline how they work in our Junior ISA guide. 

Tax-free allowances have been frozen at £20,000

You can save up to £20,000 every year into adult ISAs without it being subject to income or capital gains tax. This is called a “tax-free allowance”. For 2024/25 the annual tax-free allowance for an adult ISA is £20,000.  

If you’re looking for a longer-term investment, a stocks and shares ISA might be something worth considering. We take you through the key points in our Stocks and Shares ISAs guide, but the key point to remember is that there is no guaranteed return on any funds invested.

A new British ISA?

The ‘British ISA’, a new type of ISA, was announced in the 2024 Spring budget.  The idea around the British ISA is to encourage people to invest in UK companies with an increase in the annual ISA limit by £5,000 a year on top of the existing £20,000 limit.

While the consultation closed on 6 June 2024, there have been no updates or further announcements. With the change in government it remains to be seen whether the new British ISA will go ahead. 

If you’re new to investing and want to know more about what it means, see the guide Thinking about investing? Make sure you understand the risks.