Compare Flexible ISAs

What is a flexible ISA?

A flexible ISA, or flexi-ISA, is a type of ISA that lets you re-use your allowance when you make a withdrawal in the same tax year that you’ve made a contribution. It’s a flexible alternative to traditional Cash ISAs and Stocks and Shares ISAs.

These ISAs offer added flexibility than their traditional counterparts, but they also have more benefits. You’ll still have your personal savings allowance of £20,000, but you can withdraw money and put it back into your account as and when needed.

How do flexible ISAs work?

A Flexible ISA lets you have more control over your savings while providing funds to cover emergency expenses. Here’s how it works:

• You contribute £20,000 to your ISA at the beginning of the tax year, using your entire ISA allowance.
• You withdraw £5,000 later in the tax year to fund an urgent payment.
• Later in the same tax year, you have £5,000 ready to put back into your ISA.
• As you have a flexi-ISA, you can add £5,000 back to your total £20,000 of ISA savings for the tax year.

With a flexi-ISA, you don’t have to worry about making ad hoc withdrawals from your ISA account throughout the tax year, as you can add it back in if your circumstances change without it affecting your allowance.

How is a flexible ISA different to a fixed-rate cash ISA?

In a non-flexible ISA, any withdrawals you make from your account after using your ISA allowance result in losing that portion of your allowance permanently. Here’s how a non-flexible ISA works:

• You contribute £20,000 to your ISA at the beginning of the tax year, using your entire ISA allowance.
• You withdraw £5,000 later in the tax year to fund an urgent payment.
• Later in the same tax year, you have £5,000 ready to put back into your ISA.

• But as it’s not a flexi-ISA, you can’t put it back in as you’ve already used your full £20,000 ISA allowance, leaving you with only £15,000 of ISA-wrapped savings for the tax year.

How do I know if my ISA is flexible?

If you already have an ISA account, you can check with your ISA provider whether it is classed as a Flexible ISA.

How to check if your ISA is flexible:

1. Look at your account opening documents or emails.
2. Look at your ISA provider’s website under the ISA account details or the FAQs section.
3. Give your ISA provider’s customer service team a call or send them an email.

How much can I withdraw from a flexible ISA?

You can withdraw as much as you like from a flexible ISA, either from your current year subscription or previous years.

What are the different types of Flexible ISAs?

Flexible ISAs come in the form of Stocks and Shares ISAs and Cash ISAs. The one you choose to invest in depends on your personal investment preferences and circumstances. Let’s take a look at both options in more detail:

• Stocks and Shares ISAs: If you want to invest in shares listed on the stock market or funds managed by investment professionals, a flexible Stocks and Shares ISA lets you diversify your assets while having the opportunity to withdraw and reinvest money.
• Cash ISAS: With Cash ISAs, on the other hand, invest only in cash and return a rate of interest on your savings. Opting for a flexible ISA means withdrawing money and putting it back into the account.

Is a flexible or non-flexible ISA best for my needs?

When deciding whether you need a flexible or non-flexible ISA, it’s important to consider your financial goals and circumstances. Both offer benefits, but flexible ISAs are typically best when:

• You want access to your ISA for emergencies or short-term financial needs.

• You’d prefer a tax-free savings solution that puts you in control.

• You’re not focused entirely on the future.

Non-flexible ISAs are often better if you have long-term financial goals or won’t need to access your funds. For example, if you have a separate savings account, you can use this for emergencies and avoid dipping into the cash ISA.

Who provides flexible ISAs?

There are many different flexible-ISA providers that offer a range of flexi-ISA products.

Many banks and building societies provide flexible cash ISAs, while investment platforms and some banks provide flexible Stock and Share ISAs.

The biggest choice you need to make is between a Stocks and Shares flexi-ISA and a Cash flex-ISA.

Once you’ve decided on this, you can compare providers for each one and make your selection.

Top tips for comparing flexible ISA providers

When comparing flexible ISAs, it’s vital to consider your immediate and future preferences. With so many products—and providers—available, you’ll have no problems choosing one that aligns with your goals.

Here are the main factors to consider:

Charges

• Cash ISAs do not charge an ongoing fee, but Stocks and Shares ISAs have a platform charge.
• Check the annual management charge for each ISA provider.
• Check dealing fees, account closure fees, and any other ad hoc charges that may apply.

Research

• Many Stocks and Shares ISA providers offer exclusive research and investment tips.
• Review this research’s quality and consider whether it is worthwhile for your investment strategy.
• Think about how much of this content is only available to account holders and how much is free for everyone.

Customer Service

• ISA providers with higher fees may have better standards of customer service.
• This could include quicker response times, shorter telephone hold times, and customer service agents with better training and experience.
• Consider whether customer service is important to you. Are you a new investor with many questions, or will you be trading a lot and likely to experience account issues?

Account Features

• Some Stocks and Shares ISAs provide trading tools with their platforms.
• These include share price notifications, stop losses and limit orders, and currency exchange services.
• Think about whether you need these features and if you’re willing to potentially pay more for them.

Interest rates

• While most cash ISA interest rates are relatively low, some providers offer better deals than others.
• Fixed-rate ISAs can offer more stability, but they’re often not flexible.

What should I do if my ISA is not flexible?

If your ISA is not flexible, there’s no need to panic. Non-ISAs are perfectly good investment accounts, but they don’t give you as much flexibility over your allowance as flexi-ISAs.

If you think you’ll be utilising your full ISA allowance most years but might need to dip in for withdrawals, consider transferring your non-flexi-ISA to a flexible ISA.

Should I transfer my non-flexi-ISA to a flexi-ISA?

If you want to get the benefits of a flexible ISA, you can transfer your existing ISAs to a flexi-ISA account.

How to transfer a non-flexible ISA to a flexible ISA:

1. Check with your current ISA provider if you’ll be charged for transferring out.
2. Obtain an ISA transfer form from your chosen flexible ISA provider.
3. Complete and return the transfer form to your new provider.
4. Your ISA provider will administrate your ISA transfer for you and notify you when it is complete.

Note: Make sure you follow the above steps to transfer your ISA to a flexible ISA. If you withdraw your ISA and add it into a fresh ISA from your bank account, you will be restricted to your annual ISA allowance of £20,000, which might not be enough to fit all of your ISA funds back in.

How do I open a flexible ISA?

Once you have decided on the best flexi-ISA for you, you can open an account in a matter of minutes via the following methods:

1. Online
2. Via a mobile app
3. Over the phone
4. Posting an application form and a cheque
5. You can also contribute via monthly direct debit to your flexible ISA to gradually build up your ISA savings.

Flexible ISA application checklist:

1. Have your National Insurance Number to hand
2. Have your Debit Card details to make a lump-sum payment
3. Have your bank details to hand if you want to contribute via Direct Debit
4. You must be over the age of 18 for a Stocks and Shares ISA or 16 for a Cash ISA
5. You must be a UK resident 

Why compare flexible ISAs with us?

Deciding on a flexible ISA is a big decision, with plenty of factors to consider. Whether you’re interested in easy-access cash ISAs or want to explore flexible stocks and shares ISAs, we can help you find the best solution.

Our website features detailed information about each product, including:

• Available interest rates
• Any fees associated with opening and maintaining accounts
• Whether the company has a dedicated customer service team
• Website and app accessibility
• Extra features, including loyalty rewards and bonuses

Frequently Asked Questions