ISAs will be more user friendly from April 2024 following a range of reforms. Although the changes could have gone further, significantly, multiple subscriptions to ISAs of the same type will now be possible during each tax year.
Multiple subscriptions
Opening up multiple subscriptions will mean:
- Cash savers will be able to open a new cash ISA if a better deal becomes available. With more flexibility, some funds could go into a fixed-rate deal, with a reserve held in an easy-access cash ISA.
- Investors will be able to spread their investments over several different providers. For example, one stocks and shares ISA might be used for longer term investments, with another – offering low dealing costs – used where regular trades are made.
Other changes
Although the detail is yet to be announced, the government’s intention is that in future it will be possible to hold fractional share contracts within a stocks and shares ISA. Existing rules mean that any holding must consist of at least one full share, even though the shares of some US tech companies can cost £100s. More changes are scheduled to be introduced from April 2024. These include:
- It will be possible to make partial transfers between ISA providers during the tax year. For example, if £10,000 has been paid into a cash ISA since 6 April, £4,000 could be moved to a different provider. Under current rules, the whole £10,000 would have to be moved.
- The minimum account-opening age for cash ISAs is to be harmonised at 18. It will therefore no longer be possible for 16- and 17-year-olds to open a cash ISA – just a junior cash ISA where the investment limit is somewhat lower.
Any 16- and 17-year-olds without a cash ISA might want to open one while they still can – by 5 April 2024 at the latest.
