Key ISA Changes Taking Effect from April 2024

The UK government announced several significant changes to ISA rules at the Autumn Statement in November 2023, with most taking effect from 6 April 2024. These changes represent the most substantial reform to the ISA framework in several years and aim to make the system more flexible for savers and investors.

1. Multiple ISAs of the Same Type Allowed

Previously, savers were limited to subscribing to one ISA of each type per tax year. From 6 April 2024, you can open and contribute to multiple ISAs of the same type in a single tax year — for example, two different Cash ISAs or two Stocks & Shares ISAs — as long as your total contributions across all ISAs remain within the £20,000 annual limit.

This is a welcome change for savers who want to take advantage of the best rates across multiple providers, or who wish to hold different investment strategies within separate accounts.

2. Partial Transfers Now Permitted for All ISAs

It was already possible to transfer ISA funds between providers, but restrictions existed around partial transfers for some account types. The new rules make it clearer that partial transfers of current-year ISA subscriptions are permitted across all ISA types, giving savers more flexibility to move money without having to transfer an entire balance.

3. Minimum Age for Cash ISAs Raised to 18

Prior to April 2024, 16 and 17-year-olds could open an adult Cash ISA in addition to a Junior ISA, potentially allowing them to benefit from two annual ISA allowances simultaneously. Under the new rules, the minimum age to open an adult ISA (including a Cash ISA) is now 18. Sixteen and seventeen-year-olds are now limited to the Junior ISA allowance (£9,000) until they turn 18.

4. Long-Term Asset Funds Introduced to ISAs

The government announced the introduction of a new type of permissible ISA investment: Long-Term Asset Funds (LTAFs). These are funds that invest in illiquid assets such as private equity, infrastructure, and real estate. By allowing LTAFs within Stocks & Shares ISAs, the government aims to give retail investors access to asset classes previously available mainly to institutional investors.

Investors should be aware that illiquid investments carry specific risks, including limited ability to sell quickly. LTAFs are typically only appropriate for long-term investors comfortable with those constraints.

5. The Annual Allowance Remains £20,000

Despite speculation ahead of the Autumn Statement, the ISA annual allowance was not increased and remains £20,000 for the 2024/25 tax year. The Junior ISA allowance also stays at £9,000, and the Lifetime ISA contribution cap remains at £4,000 per year.

What Didn't Change (That Many Hoped Would)

There had been calls from various quarters for additional reforms, including:

  • Raising the LISA property purchase limit above £450,000 (it was last updated in 2017)
  • Increasing the overall annual allowance
  • Introducing a dedicated British ISA with a higher allowance for UK equity investments

The government did consult on a "UK ISA" with an additional £5,000 allowance ring-fenced for UK-listed companies. However, as of the 2024/25 tax year, this has not been implemented, and the consultation was quietly shelved.

What Should You Do Now?

The expanded flexibility around multiple ISA subscriptions and partial transfers is genuinely useful. Savers should consider:

  • Shopping around for the best Cash ISA rates without being locked into a single provider each year
  • Holding different investment strategies across more than one Stocks & Shares ISA
  • Reviewing whether the minimum age change affects any family savings plans involving teenagers

As always, it's worth reviewing your ISA strategy at the start of each new tax year to ensure your money is working as efficiently as possible within the current rules.