Autumn Statement 2023: investors to find it easier to switch stocks and shares Isa provider

Isa holders will now be able to pay into multiple Isas of the same type every year from April 2024.

Announced as part of the 2023 Autumn Statement, Isa holders will also be able to make in-year partial transfers of Isa funds between providers from April 2024.

This matters to investors, who currently are only able to pay into one stocks and shares Isa per year, limiting their ability to switching investment provider.

Here, we explain how to make the most of the new rules and the other investment changes to be aware of.

Paying into multiple Isas to be allowed – but allowance frozen

From April 2024, you'll be able to open and pay into as many Isas as you want.

This means you could switch stocks and shares Isa provider more than once in a year to take advantage of lower investment platform fees, wider fund selection or sign-up bonuses.

You'll also be able to move funds invested in the current tax year.

However, the Isa allowance remains frozen at £20,000. 

It hasn't been raised since 2017 – raised each year in line with inflation the current allowance would be almost £24,500, rising to £26,100 next year. 

This is despite Isas becoming more important than ever, due to dividend and capital gains tax-free allowances being halved in April 2024 to £500 and £3,000, respectively. Both were halved in April this year.

• Find out more: best stocks and shares Isas 2023.

Fractional shares

The Chancellor also announced an intention to allow fractional shares to be held in Isas.

To some investors, this might seem old news as up and coming investment platforms such as Freetrade and Moneybox already allow their users to invest in fractional shares in a stocks and shares Isa.

But, HMRC said earlier this year that it was their view that investing in fractional shares through an Isa wasn't allowed within the current rules and that any tax saved would need to be repaid.

Fractional shares are seen as an opportunity to encourage younger investors who might want to start investing but aren’t able to afford the cost of a whole share, which can be very expensive. A single Tesla share, for example, currently costs more than $240.

• Find out more: investing directly in shares.

Long-term asset funds

The Chancellor also announced an expansion of long-term asset fund (LTAF) rules to allow the funds to be held with an Innovative Finance Isa from April 2024.

The Financial Conduct Authority (FCA) announced earlier this year that investors in LTAFs would gain access to the Financial Services Compensation Scheme (FSCS) that would protect up to £85,000 per firm.

A LTAF is a fund made up of harder to sell ‘illiquid’ assets, such as privately owned companies or property. The move is part of a push to encourage individual investors to put their money into private markets.

These assets are generally riskier and it’s harder to sell the underlying assets if you want to take your money out. 

Unlike open-ended funds, you won’t be able to buy and sell your stake in the funds every day and this time period will vary between LTAFs.

• Find out more: investment funds explained.

Open-ended property funds

Open-ended property funds with extended notice periods will be a permitted investment within Innovative Finance Isas from April 2024.

Also referred to as bricks-and-mortar funds, these are a more common way to invest in commercial property via a collective investment scheme, such as a unit trust, Oeic or investment trust.

These invest directly into a portfolio of commercial properties, such as supermarkets, offices and warehouses, which are otherwise inaccessible to smaller investors.

Several open-ended property funds have suspended trading amid widespread concerns over the future of offices since the pandemic.