In this guide
About ISAs
An Individual Savings Account, known as an ISA, allows you to save or invest money tax-free. You can open up to four types of ISAs including a cash ISA, stocks and shares ISA, lifetime ISA and an innovative finance ISA. You can open a cash ISA at a Post office branch. Each type of ISA has its own rules, but all offer tax-free growth.
ISA allowances
It’s important you’re aware of the rules around how many ISAs you can open and the amount you can pay into each to avoid losing any of your tax-free benefits.
How many ISAs can I open and pay into?
You can open as many cash, stocks and shares, innovative finance ISAs as you like within a tax year (from 6 April to 5 April) as long as you don’t exceed the £20,000 annual allowance. You can only pay up to £4,000 into a lifetime ISA. You can spread your money across a combination of ISAs for different savings goals.
Budget 2025 update: from April 2027, the annual subscription limit for a cash ISA will be set at £12,000 for investors under the age of 65. For investors aged 65 and over the annual subscription limit for a cash ISA will remain at £20,000.
- You can open as many cash, stocks and shares, and innovative finance ISAs as you like
- Lifetime ISAs are limited to one in a tax year
- You can open ISAs with different providers to find the best rates
It’s important to check what each provider offer before you apply. Some might have different rules and impose a limit on how many ISAs you can open with them each year.
You can pay into more than one ISA each tax year and split your allowance however you like. For 2026/2027, the most you can pay combined into all your ISAs is £20,000.
As an example, you could split your allowance like this:
- £5,000 in a cash ISA
- £7,000 in a stocks and shares ISA
- £5,000 in an innovative finance ISA
- £3,000 in a lifetime ISA
Remember you can pay no more than £4,000 into a Lifetime ISA when dividing up your allowance. From April 2027 the annual subscription limit for a cash ISA will be set at £12,000 for investors under the age of 65. For investors aged 65 and over the annual subscription limit for a cash ISA will remain at £20,000.
Read more: How much can I save in an ISA?
What happens if I go over the ISA allowance?
If you’ve accidently paid too much into your ISAs and gone over your yearly allowance of £20,000, HRMC won’t charge you a penalty for your mistake. But you’ll be expected to pay tax on any interest or dividend gained on the extra amount over the allowance.
Instead of trying to correct your mistake by drawing out money, HRMC recommends calling its helpline on 0300 200 330 to explain your situation. They’ll be able to reclaim the money for the right ISA and calculate the tax you might owe.
Managing multiple ISAs
Opening more than one ISA can be a smart idea if you’re saving towards more than one goal. Some accounts may be better suited than others.
Remember, you’re responsible for keeping track of money going into each account and not going over your allowance. Banks won’t always notify you if you’ve exceeded it.
Tips for managing multiple ISAs
- Keep a list or spreadsheet to track your ISAs and how much you’ve paid in to each
- Use banking apps to track your savings and investments
- Set reminders for when bonus deals or fixed rates end
- Check your total payments to make sure you don’t go over your allowance
Can I transfer money between ISAs?
Yes, you can transfer money between ISAs. This is one of the key benefits of this type of account.
You can transfer:
- From one ISA type to another (e.g. cash to stocks and shares)
- From one provider to another
- From this year’s ISA or past years’ ISAs
When you use the official ISA transfer process, your money keeps its tax-free status. From April 2027, if you're under the age of 65, you will not be able to transfer from a stocks & shares ISA or a innovative ISA to a cash ISA.
But there are a few rules:
- If you transfer out of a lifetime ISA for anything other than a house purchase or retirement, you may pay a 25% withdrawal charge
- You can transfer cash from your innovative finance ISA to another provider, but you may not be able to transfer other investments from it
Never withdraw the money yourself to move it. That would mean losing your ISA benefits.
Transferring between flexible ISAs
Did you know that a flexible ISA offers more freedom when transferring money? If you decide at any point during the year that you need to withdraw some of the money you’ve already saved, a flexible ISA allows you to replace the amount you withdraw in the same tax year without counting towards your £20,000 annual ISA allowance. A non-flexible ISA doesn’t allow this as every deposit counts as using up your allowance.
Once you withdraw from a flexible ISA, it means you can re-deposit in the same or any other ISA (flexible or not) and it won't count towards your ISA allowance. It essentially prevents savers from being penalised if they need to access their savings.
Key takeaways
- You can open as many ISAs as you want as long as you don't exceed your ISA allowance of £20,000 with the tax year. There is an exception with a lifetime ISA, you can only pay into one per year with a limit of £4,000
- The annual ISA allowance of £20,000 can be split across a cash ISA, stocks and shares ISA, lifetime ISA, and innovative finance ISA
- To find the best rates and maximise the return on your savings and investments, you can open ISAs with different providers. However, rules may vary with each provider, so best to research first
- Always track your payments into each ISA and review regularly to keep your tax benefits, while avoiding money being reclaimed by HRMC and owing tax
If you’ve a savings goal you’re keen to reach, our savings calculators can help you plan to get there.
Want to grow your money tax-free?
Common questions
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Yes. If you go over your allowance, or move money between ISAs the wrong way, you could lose your tax-free status on some or all your savings. Always use the transfer system, stay under the limit and keep track of what you’ve paid in.
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Yes. You can open a Junior ISA for your child and a Cash ISA for yourself in the same tax year. The Junior ISA has its own allowance (£9,000 for 2026/27), separate from your own £20,000 limit.
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When you die, the executor of your will can close it. If they don’t close it, your ISA provider can close your ISA 3 years and 1 day after you die. There will be no UK Income Tax or Capital Gains Tax to pay up to that date of the ISA closing, your ISA value will form part of your estate for inheritance tax purposes.
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If you move abroad, you can keep your existing ISAs, but you usually can’t pay more money in while you’re not a UK resident. Your money stays tax-free in the UK.
- Read more
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Yes, most ISAs are protected by the Financial Services Compensation Scheme (FSCS), up to £85,000 per person, per bank. This means if your bank fails, your money is safe up to that amount only if you don’t have any other savings with that bank.
More savings and banking options
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Easy access savings
Keep your money somewhere safe, but withdraw whenever you like
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Fixed rate savings
Saving for the longer term? Earn a fixed rate of interest for a set period of time
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Everyday banking
Pay in money or withdraw cash from your bank account at thousands of our branches
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