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How does a flexible ISA affect your personal finances?

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Michael Brown

Acting Editor
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At a glance

  • Flexible ISAs allow you to withdraw and replace your money without it affecting your annual allowance of £20,000
  • Help to Buy ISAs, Junior ISAs, and Lifetime ISAs can't benefit from flexible ISA rules 
  • Both fixed and variable Cash ISAs can benefit from flexible ISA rules. 

When it comes to using your ISA allowance, it is important to evaluate your options. One of the factors which should always be considered is if your chosen providers offer flexible ISAs. Below, we have explained what a flexible ISA is and how it affects your personal finances.  

What is a flexible ISA?

At some stage you will start thinking about withdrawing from your ISA, especially if you have built up a substantial pot over the years. Perhaps your fixed cash ISA has matured, and you wish to use it as a deposit on your new home? Or it could be for a smaller purchase, such as using your easy access ISA savings to pay a plumber?

Now, because you are restricted to a tax-free ISA allowance of £20,000 per tax year, a flexible ISA will let you replace any money you withdraw from your account without it affecting your allowance.

Consider this scenario;

suppose you paid your entire £20,000 ISA allowance into a flexible easy access account. Then, halfway through the tax year you wish to withdraw £1,000 from your funds to pay for repairs on your car. Even though you have contributed the maximum allowance of £20,000, a flexible ISA will still let you replace that £1,000 before the end of the tax year. 

Future repercussions

Flexible ISAs have repercussions for the future too. 

Consider another scenario; over two tax years you’ve paid £30,000 into a flexible easy access ISA. This worked out to be £15,000 in the first year and another £15,000 in the second year.

However, before the April deadline, you decide to withdraw £20,000 as a gift for your grandchildren. After this withdrawal you can add £20,000 back into your pot before the April deadline.

This works out to be £15,000 from the previous tax year’s contribution and the remining £5,000 from the current year’s allowance.

What other flexible ISA rules should I consider

One other key point to note is that Help to Buy ISAs, Junior ISAs or Lifetime ISAs cannot benefit from flexible ISA status.

How do I know if flexible rules apply on my ISA?

Not every ISA is a flexible ISA, which means you will have to check with your provider. This can be difficult and lengthy, which is why it may be easier to use our charts. Updated daily, you can find out if your chosen ISA is flexible by clicking on “View Further Details” and scrolling down to "ISA information".

What are the best flexible cash ISAs?

The best offer for you will ultimately depend on your goals and whether you are looking for an easy access or fixed ISA. Both options offer flexible ISAs, which can be viewed on our charts.

Can you get a flexible stocks & shares ISA?

Yes. These are regularly on offer from a range of different providers which can be found on our charts.

Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

ISA on stack of coins

At a glance

  • Flexible ISAs allow you to withdraw and replace your money without it affecting your annual allowance of £20,000
  • Help to Buy ISAs, Junior ISAs, and Lifetime ISAs can't benefit from flexible ISA rules 
  • Both fixed and variable Cash ISAs can benefit from flexible ISA rules. 

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Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.

Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.