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 2020 and withdrew £7,000 to buy a new car on 15 June 2020. 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 2021.
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.