Flexible ISAs 

How is a flexible ISA different?

With a flexible ISA, you're able to withdraw money and then replace it before the end of the tax year (if your provider allows) without affecting your ISA allowance, as long as it's done in the same tax year and the account is still open. This doesn't apply to Junior Cash ISAs or Lifetime ISAs.

An ISA which isn't flexible doesn’t give you this option. Say, for example, you paid £10,000 into a Cash ISA on 6 April 2019 and withdrew £7,000 to buy a new car on 15 June 2019. The current annual ISA allowance is £20,000, so you would only be able to put £10,000 into your ISA until the new tax year on 6 April 2020.

If you pay £10,000 into a flexible Cash ISA and withdraw £7,000, you can put the full £7,000 back into the ISA – plus a further £10,000 to take you up to your £20,000 annual allowance. You just have to make sure all the payments are put back into the same account and in the same tax year as the withdrawal.

Are all ISAs flexible?

Each provider decides whether or not to provide flexible ISAs and on what terms. All our 'on sale' easy access Cash ISAs are flexible.

A flexible ISA gives you chance to use your savings without losing part of your allowance.

There are lots of reasons you might need to dip into your savings temporarily. You might, for example, want to pay for a holiday before a bonus payment from work clears or help a family member with a short-term loan.

By allowing ISAs to be flexible, the government has made it easier for you to keep your tax benefits while using your savings.

Each year, you’re allowed to pay a certain amount of money into a Cash ISA, a Stocks and Shares ISA, an Innovative Finance ISA, a Lifetime ISA or a combination of the four. The allowance for the 2019/2020 tax year is £20,000.

It’s up to you how you split your £20,000 allowance across Cash ISAs, Stocks and Shares ISAs, Innovative Finance ISAs and a Lifetime ISA as long as you don’t go over that amount in total (maximum of £4,000 in a Lifetime ISA, if you are eligible).

If you withdrew funds from a flexible ISA in March 2019 for example, and then don’t pay them back in until 6 April 2019 or later, when the new tax year has begun, you will lose the tax benefit of the flexibility.

Your ISA allowance doesn’t roll over each year if unused. So any funds you return to your ISA once the new tax year has begun count towards that year’s allowance, not the previous one.

We’ll tell you when you open an ISA if it’s flexible.

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