Your “old” ISA remains as a tax free benefit forever ( until the govt changes the benefit ) or until you withdraw it in cash , what ever the tax year and what ever the amount.
Your bank changing the interest rate on this "old ISA " is quite common, you could have the option of transferring it to a better rate if offered by your existing bank, or you can transfer it to another provider offering a better rate . THERE ARE SET PROCEDURES to do this , DO NOT withdraw in cash thinking you can put it into another provider, this must be done by the Banks internally, if you withdraw it in cash you will lose the tax benefit of your "old " ISA.
- I tend to transfer it to a better interest rate ISA each year, or at the end of the fixed term.
A new ISA for this financial year is a completely different ISA from your old one , however you can, if you want, bunch all your old ISAs together into another providers offering if they accept “transfers in” bear in mind the £85K protection, if you’re lucky enough to have accrued that much.
It sounds like your bank has created another ISA offering with its own separate / different interest rate, this will be the T and Cs you get for this years ISA , your last years / old ISA rate has finished , you have been notified by the bank what this old ISA new interest rate now is , and will have been presumably offered a transfer in to the banks new offering ISA as well / maybe ???
If you transfer your old ISA in to this new ISA offering ( if the bank allows it ) this doesn’t affect the £20K amount that you can put in for this years allowance. It is your responsibility not to put in more than your allowance for each year , it is your responsibility to not open more than one ISA per year - ie 4 ISAs with £10k in each , You have to make a declaration when opening it.