What is a Flexible ISA?

If your ISA is flexible, you can withdraw money and replace it within the same tax year without affecting your annual ISA allowance. This gives you more freedom to access your savings when you need them, without giving up the allowance you’ve already used.

With a non-flexible ISA, you can still make withdrawals if the account allows them, but paying that money back in would usually count as a new subscription and use more of your remaining ISA allowance.

How does a Flexible ISA work?

Imagine you’re saving towards a house deposit and have paid £10,000 into your ISA. An unexpected £5,000 expense comes up, so you need to dip into your savings.

If the annual ISA allowance is £20,000:

• With a Flexible ISA: you could pay in another £15,000 that tax year, made up of the £5,000 you withdrew plus the £10,000 of your allowance you hadn’t yet used.
• With a non-flexible ISA: you could pay in another £10,000, as replacing the £5,000 withdrawal would count towards your remaining allowance.

That flexibility can give you more freedom to use your savings when life changes, while still making the most of your tax-free ISA allowance.

What if I withdraw savings from previous tax years?

A Flexible ISA can also give you flexibility over savings built up in previous tax years. If you withdraw money, it’s treated as coming from what you’ve paid in during the current tax year first, followed by savings from previous tax years.

For example, imagine you have £40,000 saved from previous tax years and have paid in another £10,000 this tax year. If you withdraw £25,000:

• The first £10,000 is treated as coming from money paid in this tax year.
• The remaining £15,000 is treated as coming from savings built up in previous tax years.

If you want to replace the £25,000, you can do so within the same tax year without it using your remaining annual ISA allowance. You would also still have the unused portion of your current year's ISA allowance available to save.

Do Vernon Building Society offer Flexible ISAs?

Our Easy Access Cash ISA is flexible, designed to help you save tax-free while maintaining access to your money when you need it.

How do I transfer an ISA to the Vernon?

If you don’t already have a Cash ISA with us, you’ll need to open one first. Just make sure the account you choose allows transfers from other providers, as some of our Cash ISAs don’t support this. To transfer your existing ISA, simply fill out a form – available online or at any of our branches - and we’ll take care of the rest. We’ll send the request to your current provider, and they’ll transfer the money directly into your new account with us.