Savers will be allowed to pay into more than one Isa of the same type in a single tax year, make partial transfers between providers and leave dormant Isas open, under changes announced in the Autumn Statement on 22 November 2023 and taking effect from April 20241.
The change means savers can open and pay into multiple Isas of the same type in one tax year without losing their £20,000 allowance. Under the rules in place at the time of the announcement, savers could only put money into one of each type of Isa every tax year1. The government said the change is intended to encourage competition between Isa providers and boost interest rates1. The shake-up comes as a decade of record low interest rates has ended and savings returns have climbed, with the best cash Isas then paying 5% or more1.
The changes announced for April 2024 are:
| Change | Detail |
|---|---|
| Single Isa limit scrapped | Savers can open and pay into multiple Isas of the same type in a single tax year without losing their £20,000 allowance1 |
| Partial transfers allowed | Part of an account balance can be transferred to another Isa provider, rather than the whole amount, so some funds can stay with the existing provider and the account kept open1 |
| No more reapplying | A dormant Isa will remain open rather than the saver having to reapply for it each year1 |
| Innovative finance Isa boost | The range of permitted investments expands to include long-term asset funds and open-ended property funds with extended notice periods1 |
| Adult Isa harmonisation | The minimum opening age for adult Isas will be 18 across the board1 |
"Savers will be able to pay into more than one of each type of Isa annually, as part of the biggest shake-up of Isa rules in recent years."
The government also promised to consult on making fractional shares a permitted Isa investment and on digitising the Isa system to create "digital tools to support investors", but no timeline has been announced for either measure1.
Some rumoured changes did not appear. The government resisted pressure to raise the house price limit on a Lifetime Isa, which can be used to buy properties costing up to £450,000, even though average house prices in some parts of the country are now far higher, meaning some Lisa savers have been penalised when withdrawing money to buy a home1. A new stocks and shares Isa for UK-listed companies only, with an additional £5,000 allowance, had been speculated about by The Daily Telegraph, but no new Isa types or expanded allowances were announced1.
Why it matters for households
From April 2024, savers who hold or open Isas will no longer be restricted to one account of each type per tax year, so money can be spread across several providers within the same £20,000 annual allowance1. Partial transfers mean an existing account need not be closed to move some of the balance elsewhere, and dormant Isas will stay open rather than requiring a fresh application each year1. The Lifetime Isa property price limit stays at £450,000, so the position for Lisa savers buying homes above that value is unchanged1. The treatment of Isas is set out in our guide to ISAs, including paying into more than one ISA in a year, partial transfers and whether transferring an ISA uses your allowance.
What happens next
The Isa changes take effect from April 20241. Consultations on fractional shares as a permitted Isa investment and on digitising the Isa system have been promised, with no timeline announced1.
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