Opening an ISA today - a few questions

I opened an ISA for 2020/21 with a different platform, and I intended to open my 2021/22 ISA with Freetrade. I’ve been eagerly waiting for today (the first day of the 2021/22 tax year). I went to the app to open an ISA, and it wants me to accept this:

I apply to subscribe to a stocks and shares ISA for the tax year 2020/21 and each subsequent year until further notice.

If I go ahead and confirm, am I opening an ISA for 2020/21, or for 2021/22?

What does “each subsequent tax year” means? Does it mean that when 2022/23 starts, Freetrade will automatically open another ISA for me, without my request and without me depositing any money? I don’t understand everything about ISA; I only know you can only open one ISA account per year, and deposit up to 20k. My understanding from reading this statement is that when 2022/23 starts, Freetrade will open another ISA for me and I won’t be able to open one anywhere else - which is probably an incorrect interpretation, but I’d like clarification before I go ahead with this.

I would say the wording is incorrect and needs fixing. If you open an ISA with FT today it will be for the 2021/22 tax year, there is no way it could be anything else as you cannot open an ISA retrospectively.

If you open a Stocks & Shares ISA with FT it stays open, and when it gets to the next tax year, it simply “resets” the allowance available to the current level (presently 20K). You don’t open multiple ISAs, it’s the same one permanently.

NB. There is nothing to stop you also opening a regular cash ISA today too, but you cannot exceed the total £20K max put in them *collectively* for this year.

As always, do your own research. MSE is always good for this kind of stuff.

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Thanks! That clarifies some of my doubts.

NB. There is nothing to stop you also opening a regular cash ISA today too, but you cannot exceed the total £20K max put in them collectively for this year.

That’s a good point that I had forgot, you can indeed have one of each kind. I always open both a Cash ISA and a Stocks & Shares ISA, but the platform I use opens the Cash ISA automatically when I open a Stocks & Shares ISA with it. Do you know if that’s the same for Freetrade? That platform uses my Cash ISA for my cash that’s not invested in the Stocks & Shares ISA; I’m unsure how Freetrade handles this.

If you open a Stocks & Shares ISA with FT it stays open, and when it gets to the next tax year, it simply “resets” the allowance available to the current level (presently 20K). You don’t open multiple ISAs, it’s the same one permanently.

So that means I could open a Stocks & Shares ISA with a different platform next year, correct?

I will do some research on my own after work today, but if you know the answer to these questions it would save me a lot of time.

Sorry if I’m being a PITA. It’s just I’ve been f***ed a few times in the past due to minor details in the wording used in contracts I signed/accepted, or simply by skipping the footnotes, so nowadays I’m extremely careful about any and all small things I don’t fully understand.

FT only open a S&S ISA, they do not handle cash ISAs. Any cash uninvested simply sits doing nothing (unless you have Plus, in which case it generates interest, but I suspect this is not relevant here).

I’m not sure how it works, but I suspect you could open a S&S ISA next tax year with another provider, as long as you don’t add any new money to your FT ISA and confine it to the new one. However for the duration that your FT ISA is open you are charged a monthly fee, so it doesn’t make a lot of sense to do this tbh unless you close your FT ISA?

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I’m not sure if I’m on the wrong track but maybe you might want to consider opening a FT regular GIA (General investment account - no fees/charges for this) initially, put in £50 and see how the app works etc, before you go all-in with an ISA? There is no rush on the ISA?

You can only pay into one stocks and shares ISA in each tax year, but you can open a new ISA with a different provider each year if you want to. You don’t have to use the same provider for your Cash ISA.

My understanding is the subscription with FT will continue each year until further notice provided you hold an ISA with them. So if you open one with FT for 21/22 but choose not to invest in it in 22/23, you’ll still pay the subscription until you cash out or transfer to another provider. You can of course open a new S&S ISA with another provider next year provided you don’t contribute to more than one in any tax year.

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Thanks for taking the time again to answer.

FT only open a S&S ISA, they do not handle cash ISAs. Any cash uninvested simply sits doing nothing (unless you have Plus, in which case it generates interest, but I suspect this is not relevant here).

Got it, I thought it would be more complicated than that, happy it isn’t.

(…) However for the duration that your FT ISA is open you are charged a monthly fee, so it doesn’t make a lot of sense to do this tbh unless you close your FT ISA?

The monthly fee is quite small, so it doesn’t matter much.

I’m not sure if I’m on the wrong track but maybe you might want to consider opening a FT regular GIA (General investment account - no fees/charges for this) initially, put in £50 and see how the app works etc, before you go all-in with an ISA? There is no rush on the ISA?

That’s very good advice, but I have a GIA with Freetrade already. AFAIK you can always transfer your ISA to a different ISA provider, so if I somehow don’t like it, there’s always that option.

The £3/month is fine and a huge plus for Freetrade. I paid over £1300 with another “free” trading platform in hidden commissions (i.e. spreads) in the past two months alone, which I only found out a few days ago after looking at my account statement… that’s insane considering my profit isn’t even that much higher than that (and no, I don’t do scalping).

Awesome, that’s exactly what I needed to know.

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Really? Never heard of that before. Should be named and shamed for that dubious practice.

Maybe I’m wrong and instead I chose to open both.