Can I transfer my ISA if I am using my flexible ISA allowance?

If you transfer all of your ISA to another provider, you won’t be able to repay the funds you have withdrawn under flexible ISA rules. If you only transfer part of your ISA, you may be able to replace the withdrawn funds in your original ISA, but not the one you are transferring to.

Thanks to the personal savings allowance, all basic rate taxpayers can now earn up to £1,000 a year tax-free on any interest from savings and current accounts. Higher rate taxpayers can earn up to £500, while additional rate taxpayers have £0 personal savings allowance. This means that if you’re a basic or higher rate taxpayer, you might feel it’s not worth investing in a tax-efficient ISA. However, bear in mind that while interest rates are rising, those that have a lot in savings could get closer to reaching their personal savings allowance limit – in which case, saving in an ISA could make good financial sense.

Flexible ISAs: What they are and how they work

An ISA is a tax-efficient way to save money. Each tax year, you're given an annual ISA allowance (or a limit to the amount you can pay into an ISA). For the 2025/2026 tax year, this stands at £20,000. When comparing ISA accounts, you might notice that some are termed "flexible". This guide explains what flexible ISAs mean and why they can be useful.

Easy access cash ISAsUp to 4.85%

Fixed-rate cash ISAsUp to 4.27%

Notice cash ISAsUp to 4.5%

Is my money safe?

The Financial Services Compensation Scheme (FSCS) guarantees that it will step in to compensate the first £85,000 (£170,000 for a joint account) you have saved with a UK-authorised bank, building society or credit union in the event that the business goes bust.

Best flexible cash ISA rates

Table: sorted by interest rate, promoted deals first

1 - 10 of 175

Product	Rate	Minimum investment	Interest paid	Withdrawals	Deposit protection	Open via	Incentive	Table product description
Chip – Chip Cash ISA	4.85% AER variable (includes a 0.76% bonus )	£1	Monthly	Instant access	protected	Open via: mobile app.	Get a boosted rate of 0.77% AER on top of the 4.06% AER base when using the code CASHISA12. T&Cs apply.	Go to site View details	loading Fetching your data...
Vida Savings – Defined Access ISA Issue 1	4.63% AER variable	£10	Anniversary of account opening	Instant access	protected	Open via: website.	View details	loading Fetching your data...
Vida Savings – Defined Access ISA Issue 1	4.63% AER variable	£10	Monthly	Instant access	protected	Open via: website.	View details	loading Fetching your data...
Vida Savings – Easy Access ISA Issue 1	4.55% AER variable	£10	Anniversary of account opening	Instant access	protected	Open via: website.	View details	loading Fetching your data...
Vida Savings – Easy Access ISA Issue 1	4.55% AER variable	£10	Monthly	Instant access	protected	Open via: website.	View details	loading Fetching your data...
Paragon Bank – Double Access Cash ISA - Issue 9	4.5% AER variable	£1,000	Monthly	Instant access	protected	Open via: website.	Go to site View details	loading Fetching your data...
Paragon Bank – Double Access Cash ISA - Issue 9	4.5% AER variable	£1,000	Anniversary of account opening	Instant access	protected	Open via: website.	Go to site View details	loading Fetching your data...
Principality BS – Online Bonus 5 Access Cash ISA Issue 4	4.5% AER variable (includes a 1.55% bonus )	£1	Yearly	Instant access	protected	Open via: website.	Go to site View details	loading Fetching your data...
Trading 212 – Cash ISA	4.5% AER variable	£1	Monthly	Instant access	protected	Open via: website, mobile app.	View details	loading Fetching your data...
Furness BS – Double Access Saver ISA (Issue 1)	4.4% AER variable	£1,000	Yearly	Instant access	protected	Open via: branch, website, mobile app, post.	Go to site View details	loading Fetching your data...

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What is a flexible ISA?

A flexible ISA is an ISA that lets you withdraw funds and pay them back into your ISA account in the same tax year, without affecting your annual ISA allowance. This can apply to cash ISAs, stocks and shares ISAs and innovative finance ISAs, but not all providers offer flexible ISAs so you’ll need to check.

A flexible ISA means you won’t be penalised if you access some of your ISA funds.

How does a flexible ISA work?

Let’s say you’ve paid £20,000 into a flexible cash ISA, using your full ISA allowance for that year. In the same tax year, you decide to withdraw £10,000. Because the ISA is flexible, the withdrawal doesn’t affect your annual allowance and you can repay the £10,000 before the end of the tax year.

Note that you must repay it into the same ISA account you took it out of, although you can withdraw from a flexible cash ISA and replace it in a flexible stocks and shares or innovative finance ISA instead.

By contrast, if the ISA was not flexible and you’d paid in £20,000 but withdrawn £10,000, you wouldn’t be able to repay the £10,000 as this would mean you’d have exceeded your annual allowance.

Do I need a flexible ISA?

Ultimately, whether you need a flexible ISA is up to you. But if you think you could get close to using up your £20,000 annual ISA allowance and you plan to make withdrawals, it’s well worth choosing a flexible ISA.

On the other hand, if you know you won’t get close to reaching your annual ISA limit or you don’t plan to make any withdrawals, choosing a flexible ISA won’t be so important.

Pros and cons of flexible ISAs

Pros

Enables you to withdraw funds and replace them within the same tax year without impacting your annual ISA allowance
You can also withdraw funds from a cash ISA and replace them in a flexible stocks and shares or innovative finance ISA
Good option if you need to access funds in an emergency

Cons

Not all ISAs are flexible
Flexible ISAs might not necessarily offer the best rates
You must repay the funds into the same ISA account (unless you choose a different type of ISA)

Bottom line

Choosing a flexible ISA could be a great option if you’re worried that you will get close to using your full ISA allowance and might need to make some withdrawals. Just remember that not all providers offer flexible ISAs and it’s important to check how competitive the account is before making a decision.

Frequently asked questions

Thanks to the personal savings allowance, all basic rate taxpayers can now earn up to £1,000 a year tax-free on any interest from savings and current accounts. Higher rate taxpayers can earn up to £500, while additional rate taxpayers have £0 personal savings allowance.
This means that if you’re a basic or higher rate taxpayer, you might feel it’s not worth investing in a tax-efficient ISA. However, bear in mind that while interest rates are rising, those that have a lot in savings could get closer to reaching their personal savings allowance limit – in which case, saving in an ISA could make good financial sense.

We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables has the source: Moneyfacts Group PLC. In other cases, Finder has sourced data directly from providers.

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Written by

Rachel Wait

Writer

Rachel Wait is a freelance journalist and has been writing about personal finance for more than a decade, covering everything from insurance to mortgages. She has written for a range of personal finance websites and national newspapers, including The Observer, The Mail on Sunday, The Sun and the Evening Standard. Rachel is a keen baker in her spare time. See full bio

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