Individual Savings Accounts (ISAs) are a popular way for people in the UK to save or invest their money tax-efficiently. They offer a range of benefits, including tax-free interest, tax-free growth, and tax-free withdrawals. One question that often arises is how many ISAs an individual can open in a year.
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How many ISAs can I open a year?
The short answer is that an individual can open one cash ISA and one stocks and shares ISA per tax year. This means that an individual can have a total of two ISAs in any given tax year.
There are four different types of ISA available in the UK: cash ISAs, stocks and shares ISAs, innovative finance ISAs, and Lifetime ISAs. The rules around how many ISAs an individual can open in a year vary depending on the type of ISA.
Cash ISAs
As mentioned above, an individual can open one cash ISA per tax year. The maximum amount that can be invested in a cash ISA for the 2022/23 tax year is £20,000. If an individual does not use their full cash ISA allowance in one tax year, the unused amount cannot be carried over to the next tax year.
Stocks and Shares ISAs
In addition to a cash ISA, an individual can also open one stocks and shares ISA per tax year. There is no maximum investment limit for a stocks and shares ISA, but there is a limit on the amount that can be invested in a tax year. For the 2022/23 tax year, the limit is £20,000. Any unused portion of this limit cannot be carried over to the next tax year.
Innovative Finance ISAs
An innovative finance ISA (IFISA) is a type of ISA that allows individuals to invest in peer-to-peer lending platforms. Like cash ISAs and stocks and shares ISAs, an individual can only open one IFISA per tax year. The maximum amount that can be invested in an IFISA for the 2022/23 tax year is also £20,000.
Lifetime ISAs
A Lifetime ISA (LISA) is a savings account that is designed to help people save for their first home or for retirement. Individuals can open a LISA if they are between the ages of 18 and 39. Like other types of ISAs, an individual can only open one LISA per tax year. The maximum amount that can be invested in a LISA for the 2022/23 tax year is £4,000.
It's worth noting that an individual can transfer an existing ISA to a new provider if they wish to do so. However, they can only open one new ISA of each type per tax year. So, for example, if an individual has already opened a cash ISA with one provider in a tax year, they cannot open another cash ISA with a different provider in the same tax year. However, they can transfer their existing cash ISA to a new provider if they wish to do so.
In summary, an individual can open one cash ISA and one stocks and shares ISA per tax year. They can also open one IFISA and one LISA per tax year if they meet the eligibility requirements. The maximum amount that can be invested in each type of ISA varies, but for the 2022/23 tax year, the maximum investment limit for all four types of ISA is £20,000 (except for the LISA, which has a maximum investment limit of £4,000). Any unused portion of the investment limit cannot be carried over to the next tax year.
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