What is a flexible ISA?
Your ISA allowance is the amount you’re allowed to save into ISAs each year. It’s set at £20,000 this tax year 2020/21, and you can save either the full amount or some of this. And you can also split your allowance across different types of ISAs, provided you meet certain conditions set by the Government.
As an example, say you’ve paid the full £20,000 into your ISA. You then need to withdraw £5,000. A flexible ISA would let you put that £5,000 back into your ISA in the same tax year. An ISA without flexibility won’t.
What sorts of ISAs are flexible?
There are also certain kinds of ISAs that can’t be flexible. This includes Junior ISAs, Help to Buy ISAs and Lifetime ISAs, which are designed to help you save on behalf of children, or towards a home or retirement. You can find out more about the main types of ISAs available on the ISA page of the Government’s website.
When may you need a flexible ISA?
Think carefully before withdrawing any money
It’s important to remember that when your money is invested the value of what you hold is subject to the ups and downs of the markets. If you were to take money out when markets have fallen, you could potentially be selling your investments at a loss. And if the markets have risen by the time you look to reinvest your money, you wouldn’t be able to buy as much as the price of investments would be higher.
You can read more about how market volatility can affect your investments in our article Why investing could still be right for you.
Consider what else you may need from an ISA
Before making any decisions, it’s a good idea to be as clear as you can on what your saving priorities are, do some research and shop around.
While Standard Life’s Stocks & Shares ISA isn’t flexible, it does offer other benefits you may want to consider if you’re thinking to the future and saving for the long term. These include easy access, easy and DIY investment options, and the ability to switch the funds you’re invested in easily.
Find out more about ISAs and the Standard Life ISA today.
The value of your investments can go down as well as up and may be worth less than you paid in.
Laws and tax rules may change in the future. The information here is based on our understanding in September 2020. Your own circumstances also have an impact on tax treatment.
This information isn't intended as financial advice. If unsure, you should speak to a financial adviser and there is likely to be a cost for this.