New ISA rules clarification on multiple accounts

kiloton

I know in this new tax year we are able to open multiple ISA’s of the same type. I want to open ISAs with multiple banks, not just the one. Just wondering if this still stands or is it just that it hasn’t been updated yet. From Zopa’s website. Is it that they only allow multiple cash ISAs to be open with them only? Ie fixed and variable at same time?

“ Just so you know, you can't pay into multiple cash ISAs with different providers in the same tax year. And any money you withdraw and move outside your Smart ISA will no longer qualify as tax-free.”

Thank you

badger09

kiloton said:

I know in this new tax year we are able to open multiple ISA’s of the same type. I want to open ISAs with multiple banks, not just the one. Just wondering if this still stands or is it just that it hasn’t been updated yet. From Zopa’s website. Is it that they only allow multiple cash ISAs to be open with them only? Ie fixed and variable at same time?

“ Just so you know, you can't pay into multiple cash ISAs with different providers in the same tax year. And any money you withdraw and move outside your Smart ISA will no longer qualify as tax-free.”

Thank you

I suspect it’s because ZOPA hasn’t yet updated its website. 

New HMRC rules allow you to open multiple ISAs of the same type, with as many providers as you wish, subject to max £20k subscription each tax year. 

However, providers can limit you to 1 of each type with them. 

masonic

The changes were introduced in The Individual Savings Account (Amendment) Regulations 2024 which came into force on 6th April 2024. No outdated provider-specific term can override your statutory ability to subscribe to more than one cash ISA across different providers.

ColdIron

It's stale information. Don't forget the changes were only announced in the Spring Budget, just over a month ago

kiloton

Thank you all! Just needed reassured so if it was as they stated, I wouldn’t have to contact HMRC at Al later date.

Kaizen917

ColdIron said:

It's stale information. Don't forget the changes were only announced in the Spring Budget, just over a month ago

I would still consider them slow to act because it was actually announced in the autumn budget last year.

friolento

No provider could, or can, stop you from paying into ISAs of the same type in the same year at different providers. But HMRC would have caught up with you after they had all the reporting from all the providers. From tax year 2024-25 onwards, HMRC will no longer have any issue as long as you don't bust your annual allowance across all the ISAs you pay into.

Providers will no doubt update their T&Cs in due course.

TheWoodler

I’ve been talking about this on a couple of other threads and I’m really quite shocked at the lack of preparedness among providers, given that as @Kaizen917 says, a couple, as alluded to above, appear to indicate that you can only split your Cash ISA among their range, which IMHO is misleading. Elsewhere a lot appear still to be relying on outdated documentation. 

I know that, as @masonic says, your right to subscribe across different providers is enshrined in law, but the change needs to be properly explained to the public in key documentation. 

Skipton have got it bang on with worked examples of how it could work in their account Ts&Cs, see: https://www.skipton.co.uk/-/media/skipton-co-uk/pdf/savings/Cash-ISA-saver.ashx p2. 

This is what I’d expect to see. 

Elsewhere, as an example, when you click through to an ISA for this new tax year, Barclays Ts&Cs are dated November 2020 (link won’t paste for some reason, but still on the website as of Sun 7 Apr 11am, click through to Cash ISA > flexible ISA > Ts&Cs at the bottom of the page)

This is going to leave a lot of people very confused. Legal and governance people at each institution affected should really have been across this - it was made public six months ago and the fact the legislation only came into force on 6 April should not have affected this. I work in a sector where we respond to statutory instruments (which is what the ISA legislation is) and we work to new legislation as a deadline so that we’re ready when it comes into force.

Malchester

I spoke to a Lloyds Bank agent last week who checked with their ISA team and said that I could, if I wanted, open two or more cash ISAs. Their website says you can't and their verdict is you cannot. They are not allowing anyone to open more than one cash ISA each year

boingy

I would expect most banks to continue to limit customers to one cash ISA at that bank. The difference is that you are now free to open another one elsewhere. The only use I can think of for opening more than one in the same year is if one is at least one of them is at a fixed rate. 

TheWoodler

IMHO financial institutions really need to clarify that while they are within their rights to restrict you to one Cash ISA *with them* you are free to open another elsewhere should you so wish.