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Oct 2020

Flexible ISAs: What You Need to Know

Flexible ISAs: What You Need to Know

ISAs are a great way to put money aside while keeping it safe from the tax man’s hands; every British citizen is entitled to a yearly allowance of £20,000 to keep in these tax-efficient ISA accounts. But with quite a few having strict terms, how flexible can ISAs be? We’ve put together a blog on what you need to know about Flexible ISAs, to answer your pressing questions. 

What is a flexible ISA?

A flexible ISA is a modification of an ISA; it was originally initiated as a policy on the 6th April 2016 (so the beginning of that tax year).

This modification allows for the introduction and application of flexible features onto an ISA account while keeping the benefits of a traditional ISA; and these can be applied to an ISA account whether it was opened before or after 06/04/16.

It gives various advantages to people who opt for this form of ISA – especially when it comes to having access to your money.

The flexible ISA allows for an individual to withdraw money without any limit from the account. The money can be deposited at irregular intervals without any limit on the deposit.

What are the limits?

While this is a great option for an ISA, there are some limitations. These include:

  • This it is not carried by all providers that offer ISAs.
  • The money deposited to replace that which was withdrawn will not add up to or contribute to that of the annual subscription.
  • The only instance where that is possible is when the money deposited for the repayments exceeds that which was withdrawn, within the same tax year.
  • The money that is withdrawn from the account, though without a limit on withdrawal has to be repaid within the same tax year as that which it was withdrawn.
  • A flexible ISA account is not transferrable from one credit institution to another. For that reason, if the money that was withdrawn on a certain account is not repaid before opening another account, the money cannot be repaid into the new account.
  • In the event of a transfer, the new credit institution is not informed about the funds to be paid. Instead, the information passed on concerns the value of money that is left within the account, and that which is accessible for withdrawal.
  • The flexible ISA feature only works for withdrawals and not deposits.

What are the benefits?

Having looked at the limitations, it’s important to address the benefits to – the reasons why you should consider a flexible ISA account:

  • A flexible ISA allows for an individual to use the money that they have saved instead of their allowance on the account.
  • The unlimited withdrawal is very beneficial to individuals especially concerning situations of emergency.
  • By using flexible ISA, an individual retains his/her tax benefits and is still able to use their savings.

How do I get one?

The flexible ISA is only accessible to credit institutions that have agreed on it.

You need to make sure your chosen ISA provider supports this, if this is the ISA type you want.

Our page on Flexible ISAs contains links to providers who currently support this – so you can read more about this here. 

Investment Fund Supermarket ISAs

Stocks & Shares ISA

from Fidelity

ISA Option
Allows ISA Transfers
Regular Savings
  • Protection Scheme: FSCS
  • Fund Choice: Choose from over 4,000 investment options, including one of the widest fund ranges in the UK, plus shares, investment trusts and exchange-traded funds. There’s also expert guidance to help with your investment decisions, which includes a selection of tools and insights from Fidelity’s experts. Capital at risk. Tax and ISA rules apply.
  • Invest From: £25 through regular savings or £1,000 lump sum

Why we like it: Fidelity has lots of investment options, plus an extensive range of guidance tools to help you decide what to invest in. Their award-winning ISA is easy to start and offers great value, their a typical service fee of just 0.35%. Other ongoing charges apply. On top of that, everything is backed by Fidelity’s 50 years of investment experience.

Important: The value of investments can go down as well as up so you may get back less than you invest. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser.

Tax treatment depends on individual circumstances and all tax rules may change in the future.

Stocks & Shares ISA

from Hargreaves Lansdown

ISA Option
Allows ISA Transfers
Regular Savings
  • Protection Scheme: FSCS
  • Fund Choice: Choose from over 2,500 funds, shares, investment trusts and more to build your portfolio. UK and overseas shares. Corporate and government bonds. Exchange Traded Funds (ETFs). Ready-made portfolios to suit your goals and attitude to risk from £1,000. Expert research to help make your decisions. Investment trusts and much more. Capital at risk.Tax & ISA rules apply
  • Invest From: £25 pm or from £100 lump sum

Why we like it: Choose your own funds or alternatively a ready made portfolio. Market-beating savings and discounts of up to 5.5%. No charge to buy and sell funds. Low, tiered annual charges for holding funds, with a maximum of just 0.45% per annum. Free fund updates and analysis from experienced research team. Invest with a financially secure, FTSE 100 company.

Important: The value of your investments can rise as well as fall. You may get back less than you invested. If you’re unsure, we recommend you ask for independent advice.

Stocks & Shares ISA

from Interactive Investor

ISA Option
Allows ISA Transfers
Regular Savings
  • Protection Scheme: FSCS
  • Fund Choice: Access 40,000+ UK, US and international shares on 17 global exchanges. Choose from over 3,000 funds or select a ready made portfolio. Investment trusts, ETFs, Bonds & Gilts. Option to invest in 6 low cost funds selected by experts to get you started. Capital at risk. Tax & ISA rules apply
  • Invest From: £25 a month or any lump sum

Why we like it: An award-winning ISA that gives you complete control. The second largest platform in the UK with the widest choice of investment options in the market including funds, investment trusts, ETF’s and more. Strong ethical investment proposition with more than 140 investment options. Open online in less than 10 minutes. Access to expert independent ideas and analysis. Low cost fees and trading.

Important: The value of your investments can rise as well as fall. You may get back less than you invested. If you’re unsure, we recommend you ask for independent advice.

Junior ISAs

Junior Stocks & Shares ISA

from Nutmeg

  • Investment Options: Invest in one of four expertly designed portfolios depending on your investment style

Why we like it: Open with a lump sum from £100 to £9,000 in the 2021/22 tax year. After initial investment top up any time with no minimum. Simple, transparent - Invest in one of a range of four expertly designed portfolios depending on your investment style. All four Nutmeg investment styles are built by experts and use exchange traded funds to diversify across stocks, bonds, industries, even countries. Choose the one that works for you. No exit fees and you’re free to make adjustments. You can see where your Junior ISA is invested and how it’s performing. Withdrawals possible from age 18. You can also transfer an existing Junior ISA or Child Trust Fund. If you need any help, financial advisers and customer support will answer any questions you have

Important: The value of your investments can rise as well as fall. You may get back less than you invested. If you’re unsure, we recommend you ask for independent advice.

Important Risk Information:

The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website aims to provide information to help you make your own informed decisions. It does not provide personal advice based on your circumstances. If you are unsure of how suitable an investment is for you, please seek personal advice.

High Income ISAs

High income ISA ideas:

ISAs Products

Cash ISAs

Fixed Rate & Instant Access ISAs:

Cash ISAs: 

Stocks & Shares ISAs

Types of Stocks and Shares ISA include: 

Stocks and Shares ISAs

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