Can I invest in a new Isa to buy and sell shares and keep buying funds with my existing account?
I have a stocks and shares Isa with a DIY investing platform where I can pick and choose the funds, trusts and shares myself. I opened this last January.
This platform has been good for my needs and I’d like to continue using it, but I am thinking about opening another account with a different provider to buy and sell shares fee-free.
Can I open a new stocks and shares Isa now and pay into that, but also continue paying into my current one? Via email
A This is Money reader asks if they can pay into two stocks and shares Isas in the same tax year
This is Money, replies: Every tax year you have an Isa allowance that lets you save or invest a certain amount of money without paying tax on your returns.
For the 2021/2022 tax year, the Isa allowance is £20,000. It will be the same in 2022/2023.
You can pay this in full into either a cash Isa, an investment Isa (also known as a stocks and shares Isa) or an innovative finance Isa.
Alternatively, you can split your allowance, using it as you wish across the three different types of Isa (or four, if you include a Lifetime Isa which has a pay-in limit of £4,000 each tax year).
When a new tax year starts you will have a brand new Isa allowance. The current tax year started on 6 April 2021 and ends on 5 April 2022. Any unused Isa allowance from last year cannot be carried forward to this year.
Can you open a new Isa and use an old one?
For stocks and shares Isas, you can indeed open a new one with a different provider each tax year if you want to. However, you cannot pay into both during the same tax year.
As you opened a stocks and shares Isa in January last year, you can open another with a different provider this tax year – provided you haven’t already done so after 6 April.
But if you have been paying into that existing stocks and shares Isa since 6 April, you cannot pay into another one until 7 April 2022.
You don’t specify whether you have done that, but bear in mind the crucial rule is that you can only pay new money into one stocks and shares Isa account each year.
There is nothing to stop you buying and selling funds with money already in an old Isa, but you cannot pay cash into it and another account in the same tax year.
One solution to your problem, however, maybe to take advantage of an Isa transfer.
If you have any old cash Isa savings that you would be happy to invest instead, then you can transfer them from a cash Isa to a stocks and shares Isa – and many will allow you top open accounts and simply transfer in rather than pay in fresh money from this year’s Isa allowance.
You could also pay any of the remainder of this year’s Isa allowance into a cash Isa or your existing stocks and shares Isa and then transfer it at a later date to a different account.
These confusing and limiting rules with Isas have been criticised in the past, particularly as there is no similar limit on paying into numerous pensions.
This is Money, adds: Stocks and shares Isas can vary between providers, from the cost to the investment products available, the quality of customer service and many other factors.
And once you’ve chosen one, subject to cooling-off period rules and individual terms and conditions, you’re stuck with it for the remainder of the tax year.
That’s why it’s always worth doing your research before taking that first step. Check out This is Money’s guide on how to choose the best (and cheapest) DIY investing Isa which also includes our pick of the platforms.
Compare the best DIY investing platforms and stocks & shares Isa
Investing online is simple, cheap and can be done from your computer, tablet or phone at a time and place that suits you.
When it comes to choosing a DIY investing platform, stocks & shares Isa or a general investing account, the range of options might seem overwhelming.
Every provider has a slightly different offering, charging more or less for trading or holding shares and giving access to a different range of stocks, funds and investment trusts.
When weighing up the right one for you, it’s important to to look at the service that it offers, along with administration charges and dealing fees, plus any other extra costs.
To help you compare investment accounts, we’ve crunched the facts and pulled together a comprehensive guide to choosing the best and cheapest investing account for you.
We highlight the main players in the table below but would advise doing your own research and considering the points in our full guide linked here.
|Admin charge||Charges notes||Fund dealing||Standard share, trust, ETF dealing||Regular investing||Dividend reinvestment|
|AJ Bell YouInvest||0.25%||Max £3.50 per month for shares, trusts, ETFs.||£1.50||£9.95||£1.50||1% (Min £1.50, max £9.95)||More details|
|Bestinvest||0.40% or 0.2%||Account fee cut to 0.2% for ready made investments||Free||£4.95||n/a||n/a||More details|
|Charles Stanley Direct||0.35%||No platform fee on shares if a trade in that month and annual max of £240||Free||£11.50||n/a||n/a||More details|
|Fidelity||0.35% on funds||£45 fee up to £7,500. Max £45 per year for shares, trusts, ETFs||Free||£10||Free funds £1.50 shares, trusts ETFs||£1.50||More details|
|Hargreaves Lansdown||0.45%||Capped at £45 for shares, trusts, ETFs||Free||£11.95||£1.50||1% (£1 min, £10 max)||More details|
|Interactive Investor||£119.88 as £9.99 per month||£7.99 per month back in trading credit||£7.99||£7.99||Free||£0.99||More details|
|iWeb||£100 one-off||£5||£5||n/a||2%, max £5||More details|
|Freetrade||Free for standard account £3 month for Isa||Freetrade Plus with more investments is £9.99/month inc. Isa fee||No funds||Free||n/a||n/a||More details|
Only Vanguard funds
|Free||Free only Vanguard ETFs||Free||n/a||More details|
|(Source: ThisisMoney.co.uk July 2021. Admin charges quoted annually, may be monthly or quarterly)