ISA Allowances

eskbanker

saajan_12 said:

himonster said:

If adding to the existing one, surely that gets confusing if you decide to move money around and how would HMRC know what money is from which ISA year?

They don't need to know. Once money is in an ISA, it doesn't matter what year it came from or whether its interest.

Not wishing to add to OP's confusion, but providers and HMRC do need to differentiate between current year contributions and those from prior years!  The providers are obliged to report net current year contributions (rather than overall aggregate balances) to HMRC after each tax year, and rules around flexible ISAs, for example, treat current year money differently from prior year funds.

However, the fundamental point remains, that it's perfectly acceptable to keep funding the same ISA from year to year, and there's no need to open and fund different ISAs.

NebulaNova

Ok thanks so much everyone.

NebulaNova

vacheron said:

himonster said:

Thanks both. So technically I could have £40k in a T212 ISA once April 2026 is here? Is it obvious that the two amounts are separate within the same ISA?

Yes you could... and no it is not obvious from looking at the account balance that the total is from separate years. My T212 cash ISA probably has ISA contributions from the last 18-20 years mixed into it!

This is irrelevant though because all you really care about is how much allowance you have left this year. But it still pays to keep your own records as T212 will only know and reflect how much you have contributed to their ISA in the current tax year.

If, for example, in the 2026-27 tax year you paid £10K into say a Barclays cash ISA and 10K into a T212 cash ISA, both will show that you have 10K allowance available, even though you have actually used up your entire 20K allowance between the two providers. There is no "master" HMRC record that these companies use, it's just their guess based on their internal information (although they don't explain this anywhere which has probably got more than a few people into trouble).

Thanks. I think I'd prefer to just have the one company for ISA's otherwise it gets confusing. I'm not sure why people have them with different companies as surely if the rate was better, you could transfer everything?

eskbanker

himonster said:
I think I'd prefer to just have the one company for ISA's otherwise it gets confusing. I'm not sure why people have them with different companies as surely if the rate was better, you could transfer everything?

For those with just one easy access pot then it'll probably make sense to keep it all together in the best-paying product, transferring as necessary, but of course many wish to take advantage of fixed term/rate deals.  There are other reasons too, e.g. not wanting all eggs in one basket, not wanting to exceed FSCS protection limits, etc.

jimjames

himonster said:

Thanks both. So technically I could have £40k in a T212 ISA once April 2026 is here? Is it obvious that the two amounts are separate within the same ISA?

No, in terms of the ISA balance it's just a total. Your money will also be earning interest so the total won't be £40k but say £42458 and you won't know how much of that interest is generated from this year or last year's money.

sausage_time

jimjames said:

himonster said:

Thanks both. So technically I could have £40k in a T212 ISA once April 2026 is here? Is it obvious that the two amounts are separate within the same ISA?

No, in terms of the ISA balance it's just a total. Your money will also be earning interest so the total won't be £40k but say £42458 and you won't know how much of that interest is generated from this year or last year's money.

What you can say is that £20k of this is "new money", and that will be reported to HMRC at the end of the year so that your total ISA contributions can be tracked and checked. 

NebulaNova

Am I right in saying that on April 6th, I can open a new ISA? Or can I do it before then, but only pay into it after 6th April?

Ayr_Rage

himonster said:

Am I right in saying that on April 6th, I can open a new ISA? Or can I do it before then, but only pay into it after 6th April?

Yes to the first question.

The answer to your second question is, maybe.

Most fixed rate ISAs have a small funding window to get the rate so opening early may not work.

As for variable rate ISAs you may also find that if you do not add funds within XX days then it will be closed automatically.

You need to read the Ts and Cs for the product.

SacredStephan

himonster said:
I'm not sure why people have them with different companies as surely if the rate was better, you could transfer everything?

Because not all ISAs allow transfers in.

eskbanker

SacredStephan said:

himonster said:
I'm not sure why people have them with different companies as surely if the rate was better, you could transfer everything?

Because not all ISAs allow transfers in.

Good point, and sometimes products that do allow inward transfers pay a lower interest rate for transferred balances than on new money.