New Isa Rules Query

Homeboy_1

With the new Isa rules coming in to effect this tax year, I was thinking of putting about £5000 into a fixed rate Isa, and then later in the year opening an easy access Isa. The problem I have is that the rules state 

• You can now subscribe to multiple ISAs of the same type within the same tax year.

Because they are two different types would I not be able to open a  fixed rate Isa, and an easy access Isa in the same tax year. Thanks in advance for any help

eskbanker

Homeboy_1 said:

With the new Isa rules coming in to effect this tax year, I was thinking of putting about £5000 into a fixed rate Isa, and then later in the year opening an easy access Isa. The problem I have is that the rules state 

• You can now subscribe to multiple ISAs of the same type within the same tax year.

Because they are two different types would I not be able to open a  fixed rate Isa, and an easy access Isa in the same tax year. Thanks in advance for any help

Not sure where you're quoting that from, but the definitive rule is actually wider than that - you can subscribe to multiple ISAs of the same or different type within the same tax year, i.e. you can fund whatever permutation you like, subject only to the overall aggregate annual limit of £20K.

Homeboy_1

Thanks for your reply eskbanker. I got this from the MSE webpage. That's what confused me                                 Some ISA rules have changed. On 6 April, the UK Government made some changes to the ISA rules. These include:

• The minimum age you can open a cash ISA increased from 16 to 18.
• You can now subscribe to multiple ISAs of the same type within the same tax year.
• Partial transfers of current year ISA subscriptions are now allowed.

  As you can see it says multiple Isas of the same type within the same tax year. I just thought that a fixed rate Isa, and an easy access Isa were two different types. my apologies if I have got this one wrong 

eskbanker

Homeboy_1 said:

Thanks for your reply eskbanker. I got this from the MSE webpage. That's what confused me                                 Some ISA rules have changed. On 6 April, the UK Government made some changes to the ISA rules. These include:

• The minimum age you can open a cash ISA increased from 16 to 18.
• You can now subscribe to multiple ISAs of the same type within the same tax year.
• Partial transfers of current year ISA subscriptions are now allowed.

  As you can see it says multiple Isas of the same type within the same tax year. I just thought that a fixed rate Isa, and an easy access Isa were two different types. my apologies if I have got this one wrong 

No, they're both cash ISAs:

There are 4 types of ISA:

• cash ISA
• stocks and shares ISA
• innovative finance ISA
• Lifetime ISA

https://www.gov.uk/individual-savings-accounts

but it doesn't matter anyway, since, as above, you can fund whatever permutation you like, subject only to the overall aggregate annual limit of £20K.

Homeboy_1

Thanks eskbanker. Much appreciated

wheredoesallthetimego

Interestingly, the this is money article on the top 5 cash ISAs for 2024:
ISA rules state you can only contribute to one ISA per tax year
It is possible to switch your current year cash ISA if you move the entire amount.

Comments have been turned off.
Good that rules have changed to make it easier to understand.

eskbanker

wheredoesallthetimego said:

Interestingly, the this is money article on the top 5 cash ISAs for 2024:
ISA rules state you can only contribute to one ISA per tax year
It is possible to switch your current year cash ISA if you move the entire amount.

Comments have been turned off.
Good that rules have changed to make it easier to understand.

Wow, even by Daily Mail standards, that's a terrible article:

You can transfer Isa money whichever way you wish between an investment account to savings account, whereas previously you could only shift it from saving to investments. Yes, it's a mere ten years ago that this rule changed!

Cash Isa rates have been rising, along with non-tax free rates. It is worth opening one to shield money away from the taxman, especially with rates moving upwards. Cash ISA rates haven't been moving upwards recently.

Isa rules state you can only contribute to one Isa per tax year. I don't believe they've ever said that!

Absolute weapons-grade drivel!

masonic

eskbanker said:

Isa rules state you can only contribute to one Isa per tax year. I don't believe they've ever said that!

This used to be true of Maxi ISAs back in the early 2000s. But even then it was possible to instead opt for 2 x mini ISAs.

badger09

@Homeboy_1
Just be aware that ISA providers can choose whether to allow you to save in more than 1 ISA (eg 1 Fixed Rate & 1 Variable) with them in a tax year. 

In which case, you simply split your £20k between 2 or more providers.