There used to be more restrictions around investment ISA, but now, you can invest into more than one account each tax year - here's what you need to know about the rules..
Up until recently, stocks and shares ISAs were amazing tools to help you maximise investment returns, but they came with strings attached. Recent changes to ISA rules means that one of the key restrictions – the limits on how many you can open per tax year – have been removed. Not quite a Champagne popping moment, but definitely something to celebrate.
What is a stocks and shares ISA?
A stocks and shares ISA lets you invest within the tax-free wrapper of an ISA. You can use a stocks and shares ISA to buy different types of investment, including funds, bonds and (as the name suggests) stocks and shares.
Just as the interest you make on cash ISA savings is always tax free, you don’t pay tax on any returns you make on investments in a stocks and shares ISA. So you’ll never pay income tax on any government or corporate bonds, capital gains tax on any profit you make from the sale of shares or funds or dividend tax on any dividends you receive from shares.
The rules on stocks and shares ISAs don’t only apply to this type of ISA. They apply across all ISAs you own. The following are the key things you need to know:
There is a limit on how much, in total, you can contribute to ISAs each year. This is known as the ISA allowance. For the 2024/2025 tax year, the allowance is £20,000. The limit applies to how much you can pay in – there’s no limit on how much interest or investment returns you can make. However, if the value of your annual investments falls below the £20,000 you’ve paid in, you can’t top this up.
You can divide your ISA allowance as you wish across the 4 different types of ISA. Your choices are: cash, stocks and shares, innovative finance and lifetime ISAs. You can only pay up to £4,000 into a lifetime ISA.
You can now make new contributions into more than one of each type of ISA per tax year. So if, for example, you paid £10,000 into one stocks and shares ISA early on in the tax year, you can pay the remaining £10,000 of your allowance into a different stocks and shares ISA later in the year.
Can I open more than one stocks and shares ISA per year?
Yes! The rules have been lifted as of April 2024 and you can now open and pay into as many stocks and shares ISAs as you like each tax year. This takes some of the pressure off trying to find the absolute best stocks and shares ISA each year. You’ve now got the freedom to open and try whatever number of accounts you like.
What happens if I pay into more than one stocks and shares ISA in a year?
It will reduce your £20,000 yearly allowance by however much you pay in, but that’s it.
So, no pressure, pay into as many as you like – althought it might be best to keep your number of accounts to a manageable level.
Can I have more than one stocks and shares ISA in total?
Yes, you can. Technically, you can have an unlimited number of ISAs, although this isn’t something we’d recommend – purely because it might be difficult for you to manage and keep on top of accounts that you’ve got littered all over the shop.
When can I open a new stocks and shares ISA?
You can open a new stocks and shares ISA at any moment you choose throughout the tax year. You may have better things to do on Christmas Day (but maybe not), so feel free to open an account whenever you like.
Can I transfer stocks and shares ISAs from previous years into a new ISA?
Yes! This is one of the few aspects of ISAs for which there are no official limits or restrictions. So if, for example, you spot a provider with much lower investment fees than the ISAs you’ve opened in previous tax years, you may wish to transfer old balances to take advantage of this.
If you transfer an ISA that you have paid into during the current tax year to a new provider, you must transfer the whole balance. But if you’re transferring ISAs from previous years, you can choose whether to transfer the full amount or only part of it. There are no restrictions on how often you can make transfers – though it would probably be a hassle to do it too often. It’s also unlikely to be worth chopping and changing too regularly, especially as the pros and cons of different stocks and shares ISA providers may not be as clear cut with cash ISAs.
You can also transfer between different types of ISA, if you wish. For example, you could transfer a cash ISA into a stocks and shares ISA, or vice versa.
Regardless of what and how much you’re transferring, it’s important to do so via the official ISA transfer process. You’ll lose the tax advantages if you simply take the money out and pay it into a new provider. It will count as a new contribution rather than a transfer, and eat up your annual ISA allowance.
And bear in mind that although there are no official restrictions on transfers, ISA providers are not obliged to allow transfers in. They have to allow transfers out, though.
What’s the point of having more than one stocks and shares ISA?
It’s a good question. Having multiple financial accounts of any type gives you more to keep track of, so is arguably more effort. If you’re happy with an existing stocks and shares ISA, you might question the point of opening a different one.
That said, offers do change over time and new providers enter the market. Even if you picked the best possible ISA at the time, a provider may launch a new option with lower fees, a slicker service or a wider range of investments that interest you, for example. This could be enough to tempt you to try out its offering by opening a new account, without necessarily wanting to take the plunge of transferring your existing ISA. For the time being, at least.
Even if, in this example, you might eventually want to consolidate all your stocks and shares ISAs into the one that works best for you, for some there may still be good reasons to hold money in separate ISAs. Once you’ve paid the money in, there are no restrictions on what you can do with it within the confines of the ISA – buying and selling investments as often as you wish, in accordance with your investment strategy. Different ISAs will have different investments available, so having 2 or more ISAs may enable you to diversify your portfolio more than you’d be able to with just one.
Having 1 or more separate stocks and shares ISAs is a personal choice. Just make sure that it’s a conscious choice, made for the right reasons, rather than just not getting around to transferring accounts you’re no longer happy with.
Bottom line
If you want to maximise the returns on your investments, the tax-free returns offered by a stocks and shares ISA can make it a great way to do so. And now that you can open and pay into more than one stocks and shares ISA each year, there’s nothing to stop you opening various accounts that come with unique benefits or cheap fees for investing in certain ways, shop around and find the best ISA for your short and long-term investing goals.
Finder survey: Do you currently have any form of ISA?
Response
Yorkshire and the Humber
West Midlands
Wales
South West
South East
Scotland
Northern Ireland
North West
North East
Greater London
East of England
East Midlands
No
58.82%
51.3%
53.03%
52.17%
54.97%
42.11%
45.83%
61.16%
64.29%
40.74%
54.02%
46.59%
Yes
41.18%
48.7%
46.97%
47.83%
45.03%
57.89%
54.17%
38.84%
35.71%
59.26%
45.98%
53.41%
Source: Finder survey by Censuswide of 1032 Brits, December 2023
Frequently asked questions
Yes. And, if all goes well, the investments in each of your ISAs will grow over time. So you could make money from lots of different stocks and shares ISAs. Of course, as with any investment, there is also a risk that your stocks and shares ISAs won’t perform as well as expected, and you could even lose money. But that’s the point of long-term investing, as it evens out volatility and increases your chances of reaping rewards in the long term.
As with accidentally opening more than one stocks and shares ISA, exceeding your allowance is surprisingly easy to do, especially if you’re paying into several types of ISA. If you realise you’ve tipped over your allowance, contact HMRC as soon as possible on 0300 200 3312. It’ll advise you on what to do.
Yes. As an adult, you can hold up to 4 different types of ISA: cash, stocks and shares, innovative finance and lifetime. You can open and pay into one of each kind each tax year. Your total contributions across all the types of ISA you pay into can’t exceed £20,000 per year. The maximum annual contribution to a lifetime ISA is £4,000.
George is a deputy editor at Finder. He has previously written for The Motley Fool UK, Nasdaq, Freetrade, Investing in the Web, MoneyMagpie, Online Mortgage Advisor, Wealth, and Compare Forex Brokers. He's focused on making personal finance and investing engaging for everyone. To do this he draws from previous work and his Level 4 Diploma for Financial Advisers (DipFA), sharing what he’s learnt. When he’s not geeking out about money, you’ll find him playing sports and staying active. See full bio
George's expertise
George has written 151 Finder guides across topics including:
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