How Many ISAs Can You Have?

ISAs were established by the British regulatory agencies to encourage Brits to save more each year. Because of the many advantages of ISAs, most financial advisors recommend putting as much money as possible into these tax wrappers every single year.

The largest advantage to an ISA is that you don't have to pay any taxes on the money you earn. This includes interest earned on cash ISAs, as well as dividends or money made from sales of shares ISAs. However, those tax advantages also mean a few rules apply to setting up and contributing to ISAs every year. In this article, we will discuss limits set on how many ISAs an individual can own.

Opening ISAs

Each person is allowed to open one cash ISA and one stocks and shares ISA each year. The contribution limit for an ISA varies based on the type of account it is and the age of the account holder.

Currently, people under 50 may contribute up to £7,200 to ISAs each year. For people over 50, the limit goes up to £10,200. This money can be split between a cash and shares ISA. However, cash ISAs have stricter contribution limits, with only half of the total contribution amount going into cash accounts each year. The rest can be put into shares ISAs, or, if the individual prefers, the full limit can be put into shares ISAs if no cash accounts are used during that tax year.

Individuals cannot open more than one of each type of account each year. If you err and open more than one cash or shares ISA in a single tax year, it is important to notify your fund manager or bank right away. In some cases, the ISA may be allowed to remain open, once you have consulted with HM Revenue and Customs. However, it is important to have an expert in the field make that determination to ensure you do not receive any penalties for violating the ISA rules.

Keeping ISAs Open

Once your ISA is open, you can leave it for as long as you like. You can add to your current ISAs each year, or open entirely new accounts. Keep in mind that if you continue to open new accounts, you will need to monitor them regularly to ensure they follow the ISA guidelines and that they are earning the best returns possible. Some individuals do not like the idea of having multiple ISAs because of the difficulty tracking them, while others like the diversity that more than one or two ISAs offer.

Instead of opening news ISAs each year, you also have the option to transfer current ISAs into different types of accounts. If you do decide to transfer ISA money, do not simply withdraw funds to move them, or you will lose your tax advantages for that year. Instead, initiate the transfer through the receiving manager or institution so your transaction is counted as a transfer, rather than a withdrawal. By understanding the rules regarding ISAs, you can make the most of your money without fear of penalty or losing your tax advantages.

Important Risk Information:

This website contains information only and does not constitute advice or a personal recommendation in any way whatsoever. The value of investments and income from them can fall as well as rise and you may not get back the full amount invested. The tax efficiency of ISAs is based on current tax law and there is no guarantee that tax rules will stay the same in the future.

Different types of investment carry different levels of risk and may not be suitable for all investors. Please ensure that you read the Important Risk Information for further details. Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular investment and should read the product literature. If you are in any doubt as to the suitability of a particular investment, both in respect of its objectives and its risk profile, you should seek independent financial advice. is a trading name of Fair Investment Company Ltd which is authorised and regulated by the Financial Conduct Authority.