🔔 #AskAnna: What is a flexible ISA? Is this one of the new ISA rules announced?

Author: Anna Bowes
03rd May 2024

Q: What is a flexible ISA? Is this one of the new ISA rules announced?

Anna says:

There were a number of simplifications to the ISA rules announced in the Spring Budget this year, which came into effect on 6th April. Whilst these changes provide more flexibility when it comes to the opening of different ISAs of the same type in a single year and additional flexibility when transferring all or part of the funds from an ISA in the current tax year, the ‘flexible ISA’ itself is not something new.

The flexible ISA was introduced in April 2016 and allows you to withdraw your money from your ISA and replace it within the same tax year into the same ISA without it counting towards your current ISA allowance. This applies to historic ISAs as well as the one you are saving into for this tax year specifically. For example, your allowance is £20,000, so if you put £10,000 into an ISA during the 2024 to 2025 tax year and you then take out £3,000, the amount you can now put in during the same tax year is: £13,000 if your ISA is flexible (the remaining allowance of £10,000 plus the £3,000 you took out).£10,000 if your ISA is not flexible (just the remaining allowance).Not all ISAs are flexible – it is up to the providers whether they offer this as part of their product or not – so you should check before you make any withdrawals to see what the rules are with your provider.