- With HL, savers can spread their Isa balance across multiple banks
- They will also be able to split the £20,000 fee between the banks
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Savers can now divide their Isa balances between different types of cash Isa and different providers, ahead of new rules.
Hargreaves Lansdown’s cash platform from today Active saving* gives savers the opportunity to spread their Isa balances across multiple banks, and across easy-to-access, limited-access and fixed-term cash Isa products.
It has also launched three new easy-to-access Isa cash offers from Zopa Bank at 4.61 per cent, Santander International at 4.44 per cent and Oaknorth Bank at 4.63 per cent.
The platform will make it easy for savers to subscribe to multiple Isa products in the new tax year, in line with the new Isa rules announced in the Autumn Statement.
Ahead of the curve: Hargreaves Lansdown is the first money platform to implement the Chancellor’s Isa simplification rules
Currently you can only open one Isa per year, but under the new rules from April you can open multiple Isas in one tax year.
After much rumour, the Chancellor announced in the autumn statement that Isas would be simplified, which included new money going into multiple Isas of the same type within the same tax year.
All plans must stay within the overall Isa limit of £20,000 and the Lifetime Isa is excluded.
But Hargreaves Lansdown has taken steps to offer savers the opportunity to do this before the new tax year. This is possible because HL is the overarching Isa manager that makes this possible.
Currently there are no other platforms that can offer cash Isas from multiple banks. Hargreaves Lansdowns* Rivals on the savings platform include Raisin UK*, AJ Bell Cash Savings Hub* And Flagstone.
Andrew Hagger, founder of personal finance website Money Comms, said: ‘The launch of Hargreaves Lansdown is likely due to the cash changes announced by Isa in its autumn statement last November.’
‘Having the flexibility to hold more than one cash Isa each year gives savers the opportunity to split their tax-free cash in a way that works for them – perhaps a mix of easy-to-access and fixed-rate products.’
“I would expect all platforms to be offering the same thing by the time we get to the new tax year in April.”
How spreading Isa money could help savers
If you hold your savings in cash, taking advantage of cash Isas is becoming increasingly important as rising interest rates mean more savers will earn more interest than the tax-free allowance.
The personal savings allowance is £1,000 for basic rate taxpayers and just £500 for the growing number of higher rate taxpayers, above which savings tax is charged on the interest at income tax rates.
Among Hargeaves Lansdown’s changes to its Isa offering, it will offer a full range of cash Isa products – fixed term, easy access and limited access – from multiple banks.
Savers now have choice when managing their cash Isas alongside their existing savings portfolio, while also having the flexibility to choose from multiple deposit types.
Mark Hicks, Head of Active Savings at Hargreaves Lansdown explains: ‘This reduces complexity for savers by allowing them to have Isas from different providers all in one place.
‘This flexibility gives savers the freedom to ‘bucket’ their Isa savings – enjoy easy access to some of your money against the cost of living and also have the option to put the rest away at a market-leading rate. ‘
Savers may find higher rates if they open accounts directly with savings providers that offer the best buy accounts, but savings platforms offer convenience and the ability to keep track of rates by managing multiple accounts in one place.
The best easy-to-access Isa rate off-platform is 5.08 per cent and is offered by Zopa Bank. While the best one-year fixed rate Isa comes from Shawbrook and pays 5.01 per cent. See the best cash Isa rates in our independent best buy tables.
Platforms also sometimes offer sign-up bonuses which can help boost rates to make them better than what is offered elsewhere and provide protection from the Financial Services Compensation Scheme.
Hargreaves Lansdown says the Active Savings cash Isa platform can significantly reduce funding costs for banks and building societies, giving them the opportunity to raise Isa money even if they don’t have Isa manager status.
