What Happens If You Pay Into Two ISAs?

If you are wondering whether you can pay into two ISAs, you will find detailed guidance regarding ISAs, how to save in them and how to choose the right ISA for your savings in this blog post.

What Happens If You Pay Into Two ISAs?

If you pay into two separate ISAs, you may end up paying more tax on the interest you earn, especially in the case of stocks and shares ISAs. However, if you realise that you have paid into two ISAs by mistake and have exceeded your ISA Allowance of £20,000 you should inform the HMRC and seek their advice on how to handle the matter.

How ISAs generally work is that one can use their ISA Allowance (currently set at £20,000 for the 2022-2023 tax year) to pay into 4 separate ISAs. These include cash, shares and stocks, innovative finance or lifetime ISAs.

While you may be able to pay into two different ISAs in the same tax term such as a cash ISA and a stocks and shares ISA, you will not be able to invest in two cash ISAs within the same tax term. 

Paying into more than one individual savings account in the UK is not generally recommended, as it can complicate your financial situation and make it more difficult to track your progress towards your savings goals. However, if you feel that you need to do this for some reason, there are a few things you need to be aware of.

First, you need to make sure that you are aware of the taxation rules for individual savings accounts. If you are not careful, you could end up paying more tax than you need to. Second, you need to be careful about how you withdraw money from your accounts. If you withdraw money from one account to pay into another, you may incur fees or lose interest.

How Can You Pay Into Two ISAs?

You can pay into two ISAs by saving into two separate options such as a cash ISA and a stocks and shares ISA. 

This means that you will be dividing your £20,000 ISA Allowance between both of these savings options. You can choose to divide the amount equally or save more in one ISA than the other.

However, you cannot have two cash ISAs or two stocks and shares ISAs within the same tax term.

How Do I Know Which ISA Is Suitable For Me? 

If you are looking for a suitable ISA that meets your needs, you will have to consider your circumstances.

For instance, if you are looking to save for a short-term or towards a specific goal, you may consider saving in a Cash ISA.

On the other hand, if you intend to save for the long term, you may consider investing in a stock or shares ISA. You should also keep in mind that such ISAs generally have greater risk associated with them as compared to Cash ISAs.

If you are saving for your retirement or aiming to keep away some money to purchase your first property, a Lifetime ISA will be more suitable for you. In such cases, a maximum amount of £4,000 can be invested in any one tax year and you can attract a 25% government bonus as well.

If you intend to use your ISA as a source of funding for an investor, you can save your money with an innovative ISA. this form of savings allows individuals to loan their savings to other individuals or businesses against a tax-free interest.

If you are still not sure about which ISA to choose, you may consider the advice of a financial advisor or some personal research on a Guide to ISAs.


The above discussion helps to conclude that as long as you save in two separate ISAs of different types, there is no reason for concern. However, if you end up saving in two ISAs of the same within the same tax year, you will have to inform the HMRC to correct the error.


Stocks and shares ISAs | MoneyHelper

Can you have more than one ISA?