Isas are among the most useful tools savers and investors have.
They allow you to earn interest, dividends and capital gains tax-free – which translates into better returns over the long-term – and they could also cut paperwork and dealing with HMRC.
Currently, you can only open and pay into one Isa of each type per year, eg one stocks and shares Isa, but this rule will soon be scrapped.
Our analysis of stocks and shares Isa fees shows big differences between providers.
Here, we lists five ways to make the most of the new rules.
Find out more: Please note: the content contained in this article is for information purposes only and does not constitute financial or investment advice.How Isas are changing
From April, you’ll be able to both open and pay into more than one of the same type of Isa each year.
This means you could open two stocks and shares Isas with two different providers in the 2024-25 tax year. You’ll still have the same £20,000 allowance to spread between these and any other accounts.
As well as opening new Isas, you’ll also be able to transfer some of the investments in your Isa to another provider, while still being allowed to keep part of your portfolio on the same platform.
At the minute, you'd need to either sell the investments you mean to move and buy them on the new platform – and using up your Isa allowance in the process – or transfer the whole pot.
1. Try out a cheaper Isa provider
But, with more options for trying out new platforms, you can save huge amounts in fees by investing with the cheaper providers.
Find out more:2. Branch out into new investments
While important, your choice of investment platform shouldn't just be about fees.
Being able to try out a new Isa provider means you can experiment with investments not offered by your current provider.
If your current provider only offers funds, but you want to explore shares or investment trusts, you can open another Isa with a provider that offers these.
Consider investing a small proportion of money to begin with, to understand how the new investments perform and later decide if you want to change your investing strategy.
Find out more:3. Hold shares in one Isa and funds in another
Even when providers offer a wide variety of investments, their fee structures might mean they're good value for some, but very pricey for others.
4. Move uninvested cash into a cash Isa
Interest rates on uninvested cash in stocks and shares Isas is often terrible.
Worse still, you may be charged fees on that cash, in a practice the Financial Conduct Authority has described as 'double dipping'.
Out of 3,127 investors surveyed in January 2024, we found that 48% of them didn't know what interest rate they were getting on their uninvested cash.
Don't put up with it: if you have cash you're keeping out of the market for more than a month or two, open a new cash Isa and transfer it across.
If you know how long you plan to wait, you could even open a fixed-rate cash Isa to benefit from higher rates.
Find out more:5. Keep your investments protected
Being invested across several platforms could also offer better protection for your money if you have a particularly large investment portfolio.
This is because the Financial Services Compensation Scheme (FSCS) covers £85,000 per platform, if the platform goes out of business.
Spreading a large portfolio over several Isas, with no more than £85,000 in each, would ensure all of your investments are fully protected.
Platforms should also have customers' money 'ring-fenced', so it's protected in the event they go bust, but FSCS protection provides an extra layer of reassurance.
What are the best stocks and shares Isas?
We surveyed 4,136 customers and analysed fees to put together in-depth reviews of 18 investment platforms, with two named as Which? Recommended Providers.
Investments are not 'one-size fits all', because we all have our own budgets and goals. Our reviews can help you find the right platform to achieve them.
source https://www.which.co.uk/news/article/how-to-make-the-most-of-new-isa-rules-aPwZM6u1xHaS