What is a flexible ISA?

It's a way some cash ISAs work. In short, when your ISA is flexible, you can take money out at any point, and return it in the same tax year (by 5 April), without it reducing your current year's allowance, which is £20,000.

Here's an example to illustrate how a flexible ISA works:

Sarah has £40,000 in her cash ISA which is made up of £35,000 from previous years and £5,000 from money deposited in the current tax year, meaning she can still put £15,000 in this year's allowance.

If she withdraws £10,000, she can put in a further £25,000 in this tax year: the £10,000 she took out, plus the remaining £15,000 allowance.

In contrast, with a non-flexible ISA, if you take money out of an ISA and replace it, the money you put back reduces your allowance for the tax year in which you replenish it. If you've already hit the limit you wouldn't be allowed to put anything more back in.

Does Plum offer flexible ISAs?

Not for the time being 😕

However, stay tuned as we're constantly improving and expanding the Investments functionality 🙂

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