The 2024/25 tax year also brings new changes to ISAs.
Individual Savings Accounts (ISAs) have had a shake-up following a package of changes introduced by the government. Here we explore what the new ISA rules could mean for you. And the good news is, you’ll now have more flexibility than before.
When did the ISA changes happen?
They came into effect from 6 April 2024.
Four key changes for ISA savings
Here’s a round-up of the biggest changes:
- Pay into more than one ISA in a year
If you’re 18 or over, you can now open and pay into more than one ISA of the same type (except the Lifetime ISA) within the same tax year. Before, you could only put money into one of each type of ISA each tax year. - No need to reapply each year
If you have an existing ISA that you haven’t paid into in the previous tax year, you’ll no longer need to make a declaration to pay money in again. - Transfer all or just part of your ISA
If you’re 18 or over, you can now transfer part of your ISA from one provider to another, regardless of when the money was paid in. - Higher minimum age for cash ISAs
The minimum age for opening a cash ISA has increased from 16 to 18. This brings cash ISAs in line with the minimum age for opening other types of adult ISA.
The higher minimum age from 16 to 18 for cash ISAs is a transitional change. This means that ISA providers have from 6 April 2024 until 6 April 2026 to comply with the new rules. We’ve made these changes now, so from 6 April 2024 you’ll need to be 18 or over to apply for our Direct ISA.
What hasn’t changed?
Under 18s and parents can still pay into a Junior ISA
You can still open a Junior ISA if you’re under 18 or have parental responsibility for a child under 18. The amount you can save into a Junior ISA is £9,000 each tax year. Children can take control of their Junior ISA at age 16.
Age 16 or 17 and already have an adult ISA
If you’re 16 or 17 years old and had an adult ISA before 6 April 2024, your ISA is not affected by the new rules until you reach 18.
This means you’ll still only pay into one of each type of ISA in each tax year. And if you want to transfer money you’ve paid in during the current tax year, you’ll need to transfer all of it.
The annual ISA allowance
There’s still a cap on the amount you can save in your ISAs each year. The annual ISA allowance is £20,000 each tax year. So, you can open multiple ISAs of the same or different types in the same tax year, but your overall allowance can’t go over this limit.
In the Chancellor’s 2024 Spring Budget, a consultation to launch a new British ISA was announced. The proposal gives an additional allowance of £5,000 to be invested in UK shares, and this is on top of the normal £20,000 ISA allowance each tax year. No date has been set for the introduction of this product.
Tax-free, efficient savings
The first ever ISA was brought in 25 years ago in April. It’s a savings success story, encouraging millions of savers to set aside cash in a tax-free savings account.
ISAs shield your money from income tax, tax on dividends and capital gains tax. They offer tax-efficient savings for every age group, so you can save towards your future and maximise your returns.
To find out more about the latest ISA rules, visit https://www.gov.uk/individual-savings-accounts
Explore our ISAs
We offer two types of ISA at NS&I: Direct ISA and Junior ISA.
Discover which one might suit your savings goals best.
Direct ISA
3.00% tax-free/AER, variable
Save up to £20,000 without paying a penny in tax on the interest.
Invest from £1 to £20,000 in the tax year 2024/25.
Find out more
Junior ISA
4.00% tax-free/AER, variable
A tax free way to save for children up to the age of 18.
Invest from £1 to £9,000 in the tax year 2024/25.
Find out more
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FAQs
If you're 18 or over, you can now open and pay into more than one ISA of the same type (except the Lifetime ISA) within the same tax year. Before, you could only put money into one of each type of ISA each tax year. No need to reapply each year.
What are the changes to ISA from April 2024? ›
1.1 Increase the age for opening cash ISAs from 16 to 18 years old and over. From 6 April 2024 it will not be possible for anyone aged 17 and under to subscribe to more than one cash ISA . This is a mandatory change with transitional arrangements.
What happens if I pay into two stocks and shares in ISAs 2024? ›
However, as of April 2024, you can open and contribute to multiple ISAs of the same type without affecting your overall allowance. It's important to remember that if you don't use your full ISA allowance in a tax year, you can't carry it over to the next one.
What happens when ISA comes to an end? ›
An ISA 'matures' when it reaches the end of its fixed rate term. Your matured ISA savings will then stay tax-free as long as you keep them in an ISA. This could be either one (or more) of the new fixed rate ISAs we offer you on maturity or another ISA you transfer the funds into.
What are the changes to the ISA on April 6th? ›
You can now pay into multiple ISAs of the same type in the same year. Up until now savers could only save into one of each type of ISA in each tax year. From April 2024, you will be able to save into multiple ISAs of the same type.
What are the new rules for ISAs? ›
From April 2024, the minimum age to open an adult cash ISA is rising from 16 to 18 years old. This mirrors the age requirement for other ISAs, like stocks and shares ISAs. There's a transitional arrangement that will stay in place until 5 April 2026.
Can I put $20,000 in a cash ISA every year? ›
Yes, you can add money to your Cash ISA every year, as long as the total amount does not exceed the ISA cap for 2024/25 of £20,000. There is no cash ISA limit. If you contribute to more than one type of ISA during the same tax year, this total amount of £20,000 must be split and shared across the ISA accounts.
Can you lose all your money in a stocks and shares ISA? ›
Your savings aren't protected from losses if you invest in a stocks & shares ISA. If you put money in a stocks & shares ISA, then invest it in funds, shares or bonds, then it's a 'risk-based investment', NOT savings. So, if the things you invest in don't do well, you could lose money - perhaps even all of it.
What does Martin Lewis say about ISAs? ›
"For most people with fixed rate cash ISAs, I can't promise everyone, but certainly enough of you very close to the end of it should be ditching them, paying the penalty, and putting them [the money] in somewhere that pays more at the moment."
Are ISAs exempt from inheritance tax? ›
ISAs lose their tax-efficient status on death. This means the beneficiary will not benefit from tax-free income and growth and might have to declare them in their tax return. In addition, ISAs can form part of your estate. If your estate is liable for inheritance tax, your ISA will be caught too.
When you withdraw money from an ISA, you reduce the tax efficiencies of the annual deposit allowance. Withdrawing money from an ISA doesn't just affect the interest earned in one year — it can limit your tax-free earnings on this sum for the entire duration of your ISA.
What happens to my ISA if I leave the UK? ›
You must tell your ISA provider as soon as you stop being a UK resident. However, you can keep your ISA open and you'll still get UK tax relief on money and investments held in it. You can transfer an ISA to another provider even if you are not resident in the UK.
What happens when my ISA is full? ›
In situations where you have saved in excess of this sum in your ISAs in the tax year, you will need to discuss with your ISA providers, the removal of the excess from your ISA, incuding any interest the excess generated, and return it to you. The excess interest is taxable and should be declared.
What is the new ISA 2024? ›
As of 6 April 2024, you can now open more than 1 cash ISA each year. the deposit limit is still 20k over how may you have in each tax year.
What happens if I pay into two ISAs in one year? ›
You can pay into two ISAs in the same tax year provided they are different types of ISA. It would be fine to pay into both a cash ISA and a Stocks & Shares ISA in one tax year as long as you're below the £20,000 limit. You would not be able to pay into two different ISAs of the same type.
Can I have more than one cash ISA from April 2024? ›
Since the start of the 2024/25 tax year, there is no limit on the number of ISAs that you can open with different providers (apart from lifetime ISAs).
What are the changes in income tax in 2024? ›
For single taxpayers and married individuals filing separately, the standard deduction rises to $14,600 for 2024, an increase of $750 from 2023; and for heads of households, the standard deduction will be $21,900 for tax year 2024, an increase of $1,100 from the amount for tax year 2023.
Can I open 2 cash ISAs in 2024-25? ›
Since the start of the 2024/25 tax year, there is no limit on the number of ISAs that you can open with different providers (apart from lifetime ISAs).
What happens when ISA term ends? ›
At the end of the fixed term, unless we receive instructions from you, your account will automatically change to an Instant Cash ISA.
What are the major changes to ISA 315? ›
How has ISA 315 changed?
- Five new risk factors to make risk assessments more comprehensive: subjectivity, complexity, uncertainty, change and susceptibility to misstatement due to management bias or fraud.
- A new risk spectrum, with different levels of risks detailed on a scale.
