An Individual Savings Account (ISA) allows you to earn interest on your savings or gains and dividends on your investments without paying tax. There are 4 types of ISAs for adults and 2 types for under-18s. You are currently able to invest up to £20,000 per tax year, with the following rules:
- You can open as many of the 4 types of adult ISAs per year as you wish. You could previously only open one of each type, but this changed in tax year 2024/25. Providers may still impose restrictions of the number of accounts you open with them in a single tax year.
- You can spread the £20,000 allowance across each of your different types of ISA, and with the new rules for tax year 2024/25 pay into multiple ISAs of the same type in each financial year (for example, you could pay £4,000 into your Lifetime ISA, £8,000 to your cash ISA and £8,000 to your stocks and shares ISA in the financial year).
- The Lifetime ISA (LISA) is the exception to the above 2 rules - you can only open one LISA per year, and pay into one LISA per year.
- You can have as many ISAs as you want of each type, but the above 3 rules apply.
- Prior to 6 Apr 24, if you wanted to transfer funds from an existing ISA to a new ISA, you would have to transfer all of the contributions you had made to the existing ISA in the current tax year into the the new ISA. You are now able to make partial transfers.
- Withdrawing money from your ISA in a tax year does not adjust your allowance for that year.
- You can only pay £4,000 into a Lifetime ISA each tax year.
- If you are assigned overseas as a member of the Armed Forces (or any other Crown Servant), you, your spouse / civil partner or children are still able to open and pay into an ISA.
The ISA rules
changed in tax year 2024 / 25 (6 April 2024 to 5 April 2025). These are highlighted on the
ISA changes page. The Conservative government had plans to introduce a British ISA, but the Labour government plan to stop the rollout as they “are not planning to complicate the ISA landscape even further”.
The types of ISAs are explained in more detail below:
