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    • irvine91
    • By irvine91 9th Feb 18, 11:42 AM
    • 2Posts
    • 0Thanks
    irvine91
    LISA + Cash ISA
    • #1
    • 9th Feb 18, 11:42 AM
    LISA + Cash ISA 9th Feb 18 at 11:42 AM
    Hi -

    Apologies in advance if this has been asked before or if I have confused the rules around opening multiple ISAs!

    I want to know if I'm able to open a LISA account and a standard Cash ISA account in the same year with different banks?

    I haven't used any of my allowance this year so I want to open up a new LISA and pay in the full £4000 before April, but I also want to use up the remaining £16000 allowance in a standard cash ISA:- am I able to open a new cash ISA in the same financial year as the LISA or would I need to put the remaining allowance into my existing ISA?

    Thanks!
Page 1
    • eskbanker
    • By eskbanker 9th Feb 18, 12:21 PM
    • 6,260 Posts
    • 6,333 Thanks
    eskbanker
    • #2
    • 9th Feb 18, 12:21 PM
    • #2
    • 9th Feb 18, 12:21 PM
    You are able to pay into both a LISA and a cash ISA in the same tax year, but there are few competitive cash ISAs available so you may be better using other savings vehicles instead, see:

    https://www.moneysavingexpert.com/savings/which-saving-account
    https://www.moneysavingexpert.com/savings/savings-accounts-best-interest
    • Kim_13
    • By Kim_13 9th Feb 18, 12:42 PM
    • 1,902 Posts
    • 2,021 Thanks
    Kim_13
    • #3
    • 9th Feb 18, 12:42 PM
    • #3
    • 9th Feb 18, 12:42 PM
    As you haven't paid into your existing ISA this year, you are free to open and pay into another one. You can also open a LISA, as the ISA rules state that you can contribute to one ISA of each type per tax year. A Lifetime ISA is a new type of ISA by itself.

    You are correct in that if you put £4,000 into a LISA, you would have £16,000 of contributions left to put into a new cash ISA if you wish. As eskbanker says though, you could likely earn a better return elsewhere, due to the introduction of the Personal Savings Allowance (PSA.) This allows you to earn £1,000 of interest tax free per tax year outside of an ISA if you are a basic rate tax payer, or £500 if you are a higher rate payer. There is no PSA if you are an additional rate payer, though if the after tax rate of interest beats the rate on the ISA, it may still be worth doing even if you have no PSA or are already using it all.

    You may also find the MSE guide to Lifetime ISA's useful: https://www.moneysavingexpert.com/savings/lifetime-ISAs
    Sealed Pot 11 #520 ~ /£100
    VSP 2018 #9 ~ £19.55/£180.00
    CCCC 2018 #1 ~ £20.75/£180.00

    I'm a Board Guide on the Savings and Investments , Budgeting and Bank Accounts , Credit Cards and Marriage, Relationships and Families boards which means I volunteer to help get your forum questions answered and keep the forum running smoothly. Please remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this.) Any views are mine and not the official line of MoneySavingExpert.com
    • irvine91
    • By irvine91 9th Feb 18, 1:19 PM
    • 2 Posts
    • 0 Thanks
    irvine91
    • #4
    • 9th Feb 18, 1:19 PM
    • #4
    • 9th Feb 18, 1:19 PM
    Thank you both for the advice! I've gone head and opened a LISA account and I'll take a look at the different current account options and decide what to do with the rest.
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