ISA rule changes for 2024/25 – All you need to know

4 min Read Published: 12 Mar 2024

Autumn Statement 2023 ISA changesThe way Individual Savings Accounts (ISAs) work is changing from April 6, 2024. Chancellor of the Exchequer Jeremy Hunt made several announcements during his 2023 Autumn Statement and 2024 Spring Budget that will shape the way ISAs work moving forward.

New ISA rules 2024/25

Currently, ISA rules mean that people in the UK can save up to £20,000 per year across their ISA accounts. They can open and contribute to one of each ISA types within the same tax year. This is all due to change.

Below, we outline some of the changes that are due to come into force from April 6, 2024 and what they mean for you. Here's a quick summary if you're in a rush:

  • You'll be able to open and pay into multiple ISAs of the same type in the same tax year.
  • You'll be able to make partial transfers between ISA providers even if you opened your ISA in the same tax year.
  • You won't need to reapply for dormant ISA accounts every year.
  • You'll be able to put new types of assets in your Innovative Finance ISA.
  • The loophole allowing 16 and 17 year olds (or their parents) to save up to £29,000 tax free will close.
  • A new British ISA will be introduced pushing the ISA allowance up to £25,000 (but the exact launch date has not yet been set).


Open and pay into multiple ISAs of the same type

Currently, you can open and pay into one ISA of each type in the same tax year. This means, for example, you can open and pay into:

  • One Cash ISA
  • One Stocks and Shares ISA
  • One Lifetime ISA
  • One Innovative Finance ISA

From April 6, 2024, this will no longer be the case. Instead, you'll be able to open and pay into multiple ISAs of the same type. This means you could, for instance, open two different stocks and shares ISAs in the same year and contribute to both.

Or, for instance, if you opened a Cash ISA with one provider, but then found a more favourable deal elsewhere, you'd be able to take advantage of the better offer right away.

Make partial transfers between ISA providers

ISA transfer rules can be complex. As it stands, if you open your ISA in the current tax year and then want to transfer your funds to a new ISA, you'd have to transfer the full amount. So if you had £20,000 in your ISA, you'd need to transfer the full £20,000.

From April 6, 2024, things are changing. You'll be able to make partial transfers even if the ISA was opened in the same tax year. So, for instance, if on April 6, you opened a cash ISA and put £20,000 in it, but then decided you wanted to move half to a different cash ISA, you'd be able to open a new cash ISA and make a partial transfer.

The rules around ISAs opened in previous years remain the same; you can still make partial transfers of funds that you've deposited in previous tax years to your new ISA.

No need to reapply for existing dormant ISAs

Current rules mean that if you have an existing ISA that you're not contributing to, then you still need to reapply for it annually. If you don't do that, your provider could freeze your account meaning you wouldn't be able to make transactions until you reactivate it. From April 2024, you won't need to do that anymore, saving you the effort of having to reapply to old ISA accounts so you can keep them going.

Put new types of assets in your Innovative Finance ISA

Innovative Finance ISAs (IFISA) allow investors to make tax-free investments in peer-to-peer finance where investors are matched up with individuals or businesses that require funding. They tend to be riskier than other types of ISAs but can often attract higher returns.

From April 2024, new types of assets will be available to investors with an IFISA. Account holders will be able to invest in Long-Term Asset Funds (LTAFs) and Property Authorised Investment Funds (PAIFs), as well as the already existing peer-to-peer loans. LTAFs are designed to give investors access to long-term private market investments such as venture capital, infrastructure, and private equity. PAIFs' portfolios are primarily made up of real property or shares in UK REITs (Real Estate Investment Funds).

The Junior ISA loophole has now closed

A prior loophole allowed 16 and 17 year olds (or more likely their parents) to save up to £29,000 in ISAs every year. The Junior ISA tax-free allowance is set at £9,000 per year. But, under current rules, 16 and 17 year olds can open cash ISAs and save up to £20,000 tax free as well, in effect providing them with a £29,000 tax free ISA allowance.

This loophole will close from April 6, 2024 when cash ISAs will only be available to those aged 18 and above. As such, 16 year olds will no longer be able to open adult cash ISAs and make use of the £20,000 tax free allowance. Instead, their parents will be limited to the £9,000 tax free allowance permitted under the Junior ISA.

This is only likely to affect a small proportion of the population that was able to save up to £29,000 for their children every year.

Coming soon: Invest in a new British ISA

During the Spring Budget, the Chancellor announced a much-anticipated UK ISA which will allow savers and investors the opportunity to put away an additional £5,000 tax-free on top of the existing £20,000 ISA allowance. However, as it stands, the additional £5,000 can only be invested within UK equities. In effect, this ups the tax-free ISA allowance to £25,000 per year for those willing to put 20% of their cash in the UK market.

This new British ISA is subject to a consultation phase which is due to end on June 6. There's very little information on exactly how it'll work or when it'll be officially launched.

The new British ISA, once again, is only likely to benefit a small proportion of the population - namely, individuals who are able to save up to £25,000 a year into their ISAs.

What isn't changing in April 2024?

While there are lots of changes happening in the ISA space come April 2024, there are some things that will remain the same. There was some speculation, for instance, that the Lifetime ISA and Junior ISA limits might go up. However, these remain unchanged. Individuals can only save up to £4,000 per year in a Lifetime ISA and £9,000 per year in a Junior ISA.

The overall £20,000 tax-free ISA allowance remains the same too. The British ISA may see this increase to £25,000, but this will come with caveats that may need to be considered.

Many of the changes due to take place will be seen as positive, however. Being able to open several ISAs of the same type will open up an opportunity to diversify. If you're in the market for a new ISA, don't forget to check out our cheapest stocks and shares ISAs as well as our best easy access cash ISAs.