The way it works is that you get an allowance you can put in per year. Technically speaking it has to be a new ISA each year, and once the tax year has ended, that's that - you can only put in to the new one. Banks do actually allow the same account to carry on from year to year but it's still the same rules. You can put in ￡5,760 during 2013-14. Once 6 April 2014 arrives, that's done and you have a new limit of ￡5,940 you can put in during 2014-15. You can NOT add to anything you put in during previous tax years.
The limit is for each tax year, if in 2012 - 13 you had invested ￡5000 in an ISA, you can not top up the remaining ￡760 after April 2013, that years ISA earns interest but is closed to any investment.
The maximum annual subscription is fixed and must be made in that particular financial year , subscribed before April 5th. Any residue uninvested is lost and cannot be carried over and added to the subscripotion of the next financial year. Although it is not necessary to open a new ISA ,it may be prudent to open another ISA with a different provider,and spread one`s assets , accepting that a lower return is likely in the interest of safety.
Each year has its unique limit. Any interest is ignored as regards the limit.
By the way you are talking about a cash ISA, there are others.
Not sure what Clive means by saying each years ISA is seperate. You can build up a tax shelterd pot over a number of years. I am pretty sure this ISA pot can be invested in total into, for example a stock & share ISA even if it is higher than the annual limit.
You cannot add to an ISA - more than the annual maximum, or after the end of the tax year of each ISA. You can switch providers, if you find a better deal.
The limit for an ISA in April 2013 was ￡5,760. Over the year this amount gets interest. Let us assume that the value of the ISA in March 2014 becomes ￡5.850.
In April 2014, the ISA limit is ￡5,940. So we can open a new ISA.
And the older ISA can be reinvested again.
But can we top up the older ISA to bring it to the new years ISA limit? Or is the value of ￡5,850 fixed or is the max ￡5,760 to reinvest?
