Can you have more than one ISA?

6 min Read Published: 13 Mar 2024

Can I invest in more than one isa?Individual Savings Accounts (ISAs) are a great way to build your savings using generous tax-free allowances. They come in many shapes and sizes and are designed to appeal to both the risk-averse saver and the more adventurous investor. But, ISA rules can be complicated and new rules mean things are changing in the ISA world. So read on to find out what type of ISAs are available to you and how you can go about making use of them.

Can I invest in more than one ISA?

An ISA is a savings or investment account where your investment can grow tax-free. You can save or invest up to a maximum of £20,000 (2024/25 tax year) into an ISA.

You can invest in more than one ISA every year but there are a few things to keep in mind to comply with the latest rules. 

  • Your total investments in any tax year cannot exceed the maximum annual allowance (£20,000 in the 2024/25 tax year). 
  • You can open and invest in multiple ISAs of the same type as of April 6, 2024. 
  • Your child will need to wait until they're 18 to open an adult cash ISA as of April 6, 2024, removing a loophole that previously allowed some teenagers a £29,000 per year ISA allowance. 

How many ISAs can I have?

You can have as many ISAs as you like, and as of April 6, 2024, you can open and contribute to multiple ISAs of the same type in the same financial year. So, for example, you could open and contribute to two different Stocks and Shares ISAs or two different Cash ISAs. These new rules make it easy to benefit from the best deals on the market and try out different providers.

Prior rules meant that you could only open and contribute to one of each ISA type. So, for example, you could only open and contribute to one Cash ISA or one Stocks and Shares ISA.

While you can now have multiple ISAs of the same type, the total ISA investment in one tax year must not exceed £20,000 across all your ISAs. This tax allowance hasn't changed.

Check out our ISA rule changes article for more information on the new ISA rules and how they might affect you.

What are the different ISA types?

There are several different types of ISAs designed to suit investors and savers at different stages of their lives. Here is a quick overview of the options available to you.

Cash ISA

Think of a Cash ISA like an ordinary savings account that doesn't get taxed on any growth. There are a plethora of accounts available including accounts that offer fixed interest for typically 1, 3 or 5 years. With a Cash ISA your savings are secure as they can't go down in value, however, the interest rates can be low, so growth will be slow.

Stocks and Shares ISA

With a Stocks and Shares ISA you can invest in funds, investment trusts, bonds or company shares so any investments can go down as well as up over time. Stocks and Shares ISAs are usually run by fund platforms or fund managers so they will charge fees for both managing your investments and when buying and selling investments. Investing in a Stocks and Shares ISA should be considered a medium to long term investment so not recommended if you would require quick access to your money.

Lifetime ISA

A Lifetime ISA (LISA) was introduced in April 2017 and was designed for those wanting to either save money to buy their first property or for retirement. The maximum investment in any tax year is £4,000 which forms part of your overall annual allowance of £20,000. The government will add a 25% bonus to your investment at the end of each tax year.

You have to be aged 18-39 to open a LISA with the government bonus being paid until age 50. You can redeem your savings from age 60 unless it is to specifically buy a first property. If you needed access to your money before age 60 and you are not buying a property then a 25% penalty would apply to the amount you withdraw.

Innovative Finance ISA

An Innovative Finance ISA is a form of investment ISA that invests in peer-to-peer loans, instead of cash or funds. Peer-to-peer lending is where lenders and borrowers are matched through an online portal rather than via a bank or loan company. Since April 2016 peer-to-peer lenders have been allowed to offer ISA accounts and because of the increased risk involved, can offer a higher potential growth rate. Unlike standard ISAs, Innovative Finance ISAs are not covered by the Financial Services Compensation Scheme (FSCS) and therefore are considered a higher-risk investment.

Junior ISA

If you are a parent or guardian then it is also possible to invest in a Junior ISA which will enable you to build up an investment for when the child reaches the age of 18. The maximum investment in a Junior ISA is £9,000 per child for the tax year 2024/25. Once open, anybody can invest including grandparents and other family members. Once the child reaches the age of 18 the ISA becomes the child's property to withdraw or to carry on investing.

Check out our article for the best and cheapest Junior Stocks and Shares ISA. The article also lists the best Junior Cash ISA rates in the UK.

Can I have a junior ISA and an adult ISA at the same time?

Currently, anyone over the age of 16 can open an adult cash ISA and contribute up to £20,000 tax free. At the same time, people with a Junior ISA (JISA), can have their family and friends contribute up to £9,000 tax free to their JISA accounts too. This loophole means that children aged between 16 and 18 can receive a £29,000 tax-free allowance each year.

As of April 6, 2024, you can no longer open an adult cash ISA if you're under 18. Prior to this, people aged 16 could open an adult Cash ISA. Those who also had a Junior ISA could have their family and friends contribute up to £9,000 to their JISA, as well as up to £20,000 to their Cash ISA. This loophole meant that children aged between 16 and 18 could receive up to £29,000 tax-free allowance each year.

As of April 2024, this is no longer the case. Children will now need to wait until their 18th birthday to open an adult cash ISA. At this point, their JISA will turn into a regular adult ISA and they can then benefit from the £20,000 maximum annual allowance across all ISAs they own.

Which Cash ISA is best for me?

The best Cash ISA for you will depend on your savings goals. There are different products on the market, and some are more flexible than others. Fixed-rate ISAs, for example, come with a fixed interest rate but generally require to lock your money away for a specific period of time. Choosing to close the account and withdraw early can come with penalties including loss of interest earnings.

Variable rate ISAs come with variable interest rates but also shorter notice periods. These may work better for people who want to save for the short term or feel more comfortable knowing they'll be able to access their money quickly.

You can compare the best variable-rate ISAs and the best fixed-rate ISAs via our comparison tables. We update these regularly to give you the most accurate information on the best interest rates on the market.

Which Stocks and Shares ISA is best for me?

The best Stocks and Shares ISA for you depends on your needs as an investor as well as your level of experience. Some options allow you to build your own Stocks and Shares ISAs; you get more control over your investments in this scenario but generally need more experience to make appropriate choices. Other ISAs allow you to pick from pre-packaged funds that are managed for you. We have a comprehensive article that goes into detail about Stocks and Shares ISAs here. This is a great starting point to help you pick the right ISA for you.

Once you're ready to invest, you may want to check out our best Stocks and Shares ISA article which provides the pros and cons of various fund platforms that provide Stocks and Shares ISAs. And our best Stocks and Shares ISA article provides lots of up-to-date info, if you're looking for the best buys based on cost, investment choice, and ease of use.

Which Lifetime ISA is best for me?

Lifetime ISAs work well if you're saving for your first home or even trying to boost your retirement savings. LISAs come in many shapes and sizes. You can opt for a cash LISA or a stocks and shares LISA, for example. Stocks and shares LISAs can go up or down in value and are typically suited to mid to long-term investors.

We cover Lifetime ISAs in much more detail in our comprehensive guide to LISAs here. When you're ready to look into LISA options, feel free to compare the best and cheapest Lifetime ISAs here.

Pension vs ISA: Which is the better investment?

You can use both pensions and ISAs to save for retirement. The two are not mutually exclusive. The right choice for you will depend on factors like your age, your workplace pension, and when you'll need access to your savings, among others.

For example, if you have a generous workplace pension that offers matching contributions by your employer, you might choose to make the most of this before you consider an ISA. But, if you think you'll need to access some of your savings before the normal minimum pension age (currently 55), you might consider an ISA as well.

To help you decide, we have a detailed guide explaining the benefits of both ISAs and pensions when planning for retirement and longer-term goals.