What do the new ISA changes mean for you?

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