Potentially a silly question.

Hi,
I have read all about ISA’s but I’m still unsure.
Can you invest £20k per year? Cumulatively.
So, I invest £20k this tax year.
Next tax year I invest another £20k, so I now have a total of £40k in ISA’s.
Is that right, or do I have to cash in the first ISA?
Does this question make sense?
Thank you.



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Comments

  • refluxer
    refluxer Posts: 2,539
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    edited 27 November 2023 at 10:09PM
    Yes, you can save £20k per tax year in ISAs, so £20k in the first year and another £20k in the second year, making £40k in total and so on.

    MSE's ISA guide is worth a read if you haven't seen it already...

    https://www.moneysavingexpert.com/savings/isa-guide-savings-without-tax/
  • What's important to remember is there are right and wrong ways to deal with the contents of an ISA if you want to keep its tax free status.
     I agree you need to read carefully the above guide and DON'T EVER transfer from one ISA to another by just withdrawing the money. You'll lose its tax free status if you do unless it's a special type of ISA (read the guide for further details) that does allow money to be taken out and then replaced. Most do not allow this.
  • Albermarle
    Albermarle Posts: 21,185
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    Hi,
    I have read all about ISA’s but I’m still unsure.
    Can you invest £20k per year? Cumulatively.
    So, I invest £20k this tax year.
    Next tax year I invest another £20k, so I now have a total of £40k in ISA’s.
    Is that right, or do I have to cash in the first ISA?
    Does this question make sense?
    Thank you.



    Apart from the useful guide linked in the previous posts, just scrolling through this forum and reading through the threads, should also greatly improve your understanding.
  • Thanks everyone. I think I'm just about up to speed.
    If  I pay into an Isa now, does it end at the end of the financial year, or does it run for 12 months from the investment date?

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  • Ocelot
    Ocelot Posts: 490
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    edited 28 November 2023 at 9:07PM
    Thanks everyone. I think I'm just about up to speed.
    If  I pay into an Isa now, does it end at the end of the financial year, or does it run for 12 months from the investment date?

    An ISA doesn't just last one year. It stays tax free until you withdraw it. I still have the same ISA money 'invested' from previous years, some going back to 1999, currently 11 separate ISAs, as I have merged a few over the years.

    If you pay into a fixed term ISA (ie 1-5 years) that rate lasts that long at the specified rate (although you can transfer it out to another ISA, with a penalty). If you continue it to the end of its term, you can either transfer it to another ISA, or continue in the new ISA your current provider offers you.

    If you have an easy access ISA, it remains indefinitely until you transfer it with no penalty.

    You don't lose its tax-free status once put into an ISA (unless a future Government or legislation decides to).
  • Thanks everyone. I think I'm just about up to speed.
    If  I pay into an Isa now, does it end at the end of the financial year, or does it run for 12 months from the investment date?

    Your allowance for paying into an ISA is £20k per financial year.
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