ISA reforms loosen restrictions
More user friendly from April 2024
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.
Currently, it is only possible to pay into just one ISA of each type per tax year. Multiple subscriptions will mean:
Unfortunately, the annual £20,000 ISA contribution limit will not see any change, with the £9,000 junior ISA and £4,000 lifetime ISA limits also frozen.
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 – such as Apple and Microsoft – can cost £100s. The availability of fractional shares will particularly help regular savers.
Other changes to be introduced from April 2024 include:
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.
The range of investments permitted within an innovative finance ISA is to be expanded, although the newly permitted investments are unlikely to be suitable for most investors.