Can I open both Stock and Shares ISA and Stocks and Shares LISA in the same year?

Financial Chat
#1

I’m just reading many sources, and a lot of them contradict themselves… can you open both these accounts in the same year?

Are ISAs and LISAs classified as the same?

I understand either way I can only pay up to £20,000 total each year in total but I want to use the LISA for first time house buyer and the ISA for savings (risky savings) but not sure if I can do this…

Thanks :slight_smile:

#2

Short answer is yes to the first question, no to the second, but long answer is here: Individual Savings Accounts (ISAs) - GOV.UK (www.gov.uk) :slight_smile:

#3

LISA is a special kind of ISA so is separate to a Cash, Stock and Shares and Innovative Finance ISA’s. All ISA’s need to add up to the £20,000 limit.

The overall ISA limit is £20,000 in the 2020/21 tax year. You are allowed to split this between a LISA (up to the maximum £4,000) and put the remainder in a cash ISA, stocks & shares ISA and/or an innovative finance ISA in the same tax year.

You’re also allowed to hold a Help to Buy ISA and a LISA at the same time, though you can’t get the first-time buyers’ bonus on both (see Help to Buy ISA vs LISA info below. But you could get the Help to Buy ISA bonus for a home and then use the LISA and its bonuses for retirement.

#4

Thank you Gavlar

#5

Thanks pal! I take it you meant all ISAS cant surpass £20,000 total limit?

#6

That’s right. £20,000 is the ISA allowance. How you divide that £20K up is almost entirely up to you. The £4k limit on the LISA being the exception.

Note that there is also a tax-free allowance for savings that covers regular accounts (up to a point).
Tax on savings interest - GOV.UK (www.gov.uk)

Returns on cash are negligible at the moment, so unless you have a few hundred thousand knocking about, I’d be inclined to keep the ISA allowance just for investments and keep any cash in a regular account.

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