How many cash Isas can I have?

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I‘ve been reading around the rules of cash Isas with regard to how many you can have and pay into.  I am a little confused. As far as I understand you can only pay into one cash Isa each year. But I’ve also heard you can transfer money between accounts. 

I’m a bit lost so any guidance on this would be great appreciated.

S Long, via email

Everyone has an annual allowance of £20,000 which can be split between different types of Isa – cash Isa, stocks and shares Isa, “innovative finance” (or “peer-to-peer”) Isa and Lifetime Isa.

All are tax-free accounts.

Under the current rules savers can open one new cash Isa each year and pay in their entire allowance of £20,000.

Those with existing Isas from previous years are also able to transfer the balance to a new provider without it counting towards their allowance, as long as the bank or building society allows it. Not all do: currently just three of the top five variable-rate cash Isas accept transfers from old Isas.

Hinckley & Rugby Building Society, which pays a top rate of 1.05pc, and Skipton Building Society, which offers 1pc, do not. However, the Post Office does allow customers to transfer their funds to its 1.01pc Isa. So do the AA and Ford Money, which offer 0.96pc and 0.9pc respectively.

Savers will have better luck transferring cash to fixed-rate Isas as the majority of providers accept transfers.

However, savers who decide to transfer old Isas must not simply shut down their old account and pay the money into a new one. You must inform your new provider and ask for the Isa to be transferred; it will contact the other bank. If you close the first account yourself, your savings may no longer be tax-free.

If you want to transfer savings that you’ve paid into a cash Isa during the current tax year, you can do so, but you must transfer the entire balance.

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