On the 25th birthday of the ISA, the Government has introduced several new changes that will be introduced for the 2024/25 tax year.
What is an ISA? Click here to read more.
From 6th April, ISAs are getting a spring clean, below are four ways ISAs will be changing and what it means for you as a saver going forward.
Currently, savers can only open one type of ISA per provider, but these rules are set to change. The new rules mean that soon you’ll be able to open ISAs with different providers. This change could offer Cash ISA savers the chance to go after more competitive rates more easily, or pick and mix different accounts, such as opening an easy access account, notice account or a fixed rate account, to name a few.
It also helps protect those who accidentally pay into more than one of the same type of ISA in a single tax year. This is easily done if paying into an ISA by direct debit, and the change removes the risk of breaking the rules.
The rules currently force an all or nothing approach to current year ISA transfers – you have to transfer your entire ISA of that type from the current tax year, or nothing at all. The new change means that you’ll be in charge of how much you want to transfer, no matter when you made the subscription.
So, if you have £10,000 sitting in an ISA and you wish to only transfer £5,000 to a different provider, you can now do so from April 2024 onwards.
Those with ISAs are currently required to, in essence, reapply for ISAs they already hold when there has been a gap of one tax year where no funds have been paid in. From 6th April, this rule is being removed, and should reduce the potential for confusion and cut down on unnecessary red tape.
This rule only directly impacts Cash ISAs, where the minimum age for opening an account is currently 16 years old. From the 2024/25 tax year, the 18+ rule will mirror other adult ISAs. 16 and 17-year olds will continue to be able to open and save into a Junior ISA.
At the moment not all of these new options are available with Aldermore, but we are looking to introduce them.
To find out more about our range of ISAs including our new Easy Access ISA, click here.