You can split your £20,000 annual Individual Savings Account (ISA) allowance among four different types of ISA but not into more than one ISA of the same type in the same year. That means you can open four ISAs per tax year. Your allowance can be invested over the course of one tax year which starts on April 6th. The four types of ISA are: cash ISAs, Stocks and Shares ISAs, Innovative Finance ISAs and Lifetime ISAs.

How Many ISAs Per Household?

The £20,000 limit applies to each adult, but if we think in terms of households the limit is higher. If you are married or have a civil partner you each have a £20,000 limit each year. If you are a parent or guardian of a child under 18 each child has their own Junior ISA limit of £9,000 per year.

The Junior ISA can be split between one Cash and one Stocks and Shares ISA. A parent or guardian of a child opens and manages the ISA but the money belongs to the child who can take control of the account when they are 16 but can't withdraw money from the ISA until they are 18. Once open, anyone can pay into the Junior ISA up to the annual limit, so grandparents, uncles, aunts or even friends can make a lasting, annually compounding, gifts for your children.

Unlike adult ISAs Junior ISAs are limited to one ISA provider for each type. You can't switch Junior ISA provider from year to year. If you do want to change provider you'll have to transfer the investment from previous years to your new Junior ISA account.

Age Limits

The minimum age limits vary by ISA type but to be eligible for an ISA you must be resident in the UK (or if not resident then a Crown servant, such as a member of the armed services living abroad, or their civil partner).

How Many ISAs from Previous Years?

Notice that you can open an ISA with a different provider of the same type each tax year. That means that you could have up to twenty ISAs of the same type e.g. stocks and shares ISAs which have accumulated over the years. This can become unwieldy if you have to log in to several websites and use several passwords. Some people choose to transfer old ISAs into a single account for this reason. Just to illustrate how complicated this could get here's an extreme example.

In the example above we've switched ISA provider every 5 years so that over the 20 year history of ISAs we have accumulated 5 different providers. But in theory you could have chosen a different provider each year and have 20 ISAs!

How Much Could You Have Saved?

If you had invested your full ISA limit the total you could have saved is £206,560. If you had received an average return of 6% per year on your investments that would now be worth £336,900. If both you and your partner had invested the full limit that would double the value.

If you're annoyed that you missed out remember it's never too late to save, but the sooner you do it the better. And remember that fees compound as well as returns. Over the 23 year history of ISAs a 2% fee would have compounded to a total fee of £96,561 or 43% of your return. On the graph above see how the high-fee line (red) drops further and further below the low-fee line (orange) as 2% fees steadily eat away your returns. This is why you will receive a huge long-term payoff if you shop around for an ISA provider that has low fees. Our course on Finding the Right Investment Platform will help you compare platforms to find one that suits you for a reasonable price.