ISA confusion

Stokieblokie

Hi all

Excuse my ignorance here but can someone please clarify - the 20K limit for cash isa, does that mean that 20K is the upper limit of what you can have in there? i.e I have an isa into which I put 20K in January does that mean that's all I can have in there ever? And any interest I will have to withdraw?

Or is that a yearly limit amount, as in as of April could I have put another 20K into the same ISA? 

I asked the bank but they were unable to answer me and told me to ring the savings team - but they've not been easy to get hold of.

tia for the help

katejo

It's just the annual limit for each tax year. If you paid in £20K before April 2025, you can add another £20K now.  Don't withdraw the added interest! 

Peter999_2

It is £20k per year.    There are some people who have over a million pounds in ISAs and don't pay a penny in tax.

The only thing you have to do is that when the cash ISA account expires and you want to move the money to another high interest ISA with another provide you must use the other providers ISA transfer process to keep it tax free and not use your current years allowance.         If you just withdrew the money into your bank and then put it in another providers ISA you would lose the original ISA status and it would use this years allowance.

As you can imagine it's quite straight forward to transfer to a new ISA.

TadleyBaggie

As above, it's the amount you can put into the ISA annually, the actual value of the ISA is irrelevant. 

Stokieblokie

Thank you so much for clearing that up for me 
Off to transfer some money 

nologo

My understanding is £20,000 in a cash ISA each year, April 6- to April 5th,then you can open another cash ISA (either with the same institution or a separate one) the following year, the interest usually stays in (compounding) some allow withdrawals (but may have a penalty) you can also move ISAs to a different provider, but get the new provider to move it (just ask them)

mtc95

Stokieblokie said:

...
I asked the bank but they were unable to answer me and told me to ring the savings team ...

Seriously?  That really doesn't reflect well on your bank.

Albermarle

Stokieblokie said:

Thank you so much for clearing that up for me 
Off to transfer some money 

It would probably be useful for you to read through the forum, as it is a good way to get up to speed on all kind of ISA issues.

slinger2

nologo said:

My understanding is £20,000 in a cash ISA each year, April 6- to April 5th,then you can open another cash ISA (either with the same institution or a separate one) the following year, the interest usually stays in (compounding) some allow withdrawals (but may have a penalty) you can also move ISAs to a different provider, but get the new provider to move it (just ask them)

There's not 1 ISA per tax year. You can have as many as you like: 10 or 100 if you want. It's just that total you put in all of them can't be more than £20k in each tax year. Also you don't need to open a new one each year. You can simply add more money into an existing one (as long as the account T&Cs allow it).

badger09

nologo said:

My understanding is £20,000 in a cash ISA each year, April 6- to April 5th,then you can open another cash ISA (either with the same institution or a separate one) the following year, the interest usually stays in (compounding) some allow withdrawals (but may have a penalty) you can also move ISAs to a different provider, but get the new provider to move it (just ask them)

BIB
In addition to slinger2’s comment, ALL ISA providers must, by law, allow withdrawals though as you say, some withdrawals, eg from a Fixed Rate ISA may incur a penalty.