Can you have more than one ISA?
The short answer is yes. You can have up to four different types of ISAs at one time, as long as you meet the criteria for each one. These include:
- Cash ISA
- Stocks and Shares ISA
- Innovative Finance ISA
- Lifetime ISA
But, you can only pay into one of each type of ISA each tax year. Additionally, you can’t exceed your annual ISA limit overall. For example, once you’ve opened a Cash ISA, you can’t open another one until the new tax year, but you could transfer an existing Cash ISA.
How many cash ISAs can I have?
You can have multiple ISAs, but you can’t pay into more than one ISA type during each tax year. That means you could pay into one Stocks and Shares ISA and one Cash ISA, but you couldn’t pay into two different Cash ISAs.
So, while it is possible to have more than one Cash ISA, you’d only be allowed to pay into one of them each tax year. Once you’ve opened a Cash ISA, you can’t open another one until the new tax year, but you are allowed to transfer an existing Cash ISA.
What is the ISA allowance?
The ISA allowance for each tax year is £20,000 in total. That means you can pay a maximum of £20,000 into multiple ISAs in a single tax year. For a Lifetime ISA, you can pay up to £4,000 per tax year.
As an example, you could pay £8,000 into a Stocks and Shares ISA, £5,000 into a Cash ISA, £4,000 into a Lifetime ISA and £3,000 into an Innovative Finance ISA.
Can I transfer money from one ISA to another?
Yes, you can do an ISA transfer between different accounts. This allows you to switch to a different ISA even if you’ve already paid into your existing one in the current tax year.
ISA transfers depend on your account and provider. It's important to initiate the transfer through your ISA provider to make sure it's a seamless transition and keep the tax-free status. Note that an ISA transfer doesn’t involve withdrawing from one account and depositing in another. In fact, withdrawing and depositing would mean your funds would lose their tax-free status overall.
If you have an ISA with another provider, don’t worry. You can transfer your funds to a Sainsbury’s Bank Cash ISA (with the exception of a Lifetime ISA).
When can I open an ISA?
ISAs follow the same rotation as the tax year which always runs from April to April. In the tax year 2023/24, the annual allowance runs from 6 April 2023 to 5 April 2024. So, you can open multiple ISAs until 5 April 2024 to contribute to your ISA for the following tax year.
In terms of age, you can open:
- A Cash ISA from age 18
- A Stocks & Shares ISA from age 18
- An Innovative Finance ISA from age 18
- A Lifetime ISA between the ages of 18 and 40 (this can be deposited into until you are aged 50)
What about ISAs from previous tax years?
Your annual ISA allowance resets at the beginning of each new tax year. You cannot carry your allowance over, so if you don’t use it in time, it’s gone. You’re able to transfer your previous year’s deposit into a separate ISA, as this won’t be included in the current year’s allowance.
For instance, if you have £15,000 in last year’s ISAs, you can transfer the total to your new ISA and still have your £20,000 allowance for the current tax year. The best part is the interest on the combined balance will also be tax-free.