ISA flexibility explained
Knowing about ISA flexibility could make a difference in deciding whether an ISA or any other (non-ISA) savings account is right for you.
What's on this page
What ISA flexibility is
ISA flexibility lets you do more with your ISA. ISAs used to be known as 'the first place you put money into, and the last place you took it out from'.
ISA flexibility has changed that. It allows you to take out money from your ISA account and replace that money within the same tax year without eating in to your annual ISA allowance.
Here's an example to explain this.
Say you open a cash ISA at the start of a tax year. You make a deposit which uses up some of your ISA allowance for that year.
At the start of the following tax year, your annual ISA allowance resets. You then take out £100 from your ISA. Later in the same tax year, you pay £100 back in.
What you've taken out and paid in just takes you back to your balance at the start of the tax year – you haven't used any of your annual ISA allowance for that year. So you can still save against it for the rest of the tax year.
Keep in mind, not all ISAs offer flexibility – so check the terms and conditions before applying.
The Nationwide cash ISA is also flexible
When you open one or more cash ISAs with us, they'll form part of a single portfolio cash ISA.
This means you can take money out of one cash ISA product and place it in another in the same tax year without it counting towards your annual ISA allowance.
ISA flexibility and withdrawals
Withdrawals made in previous years
ISA flexibility only applies to what you've done with your 'active' (current tax year) ISA. It does not apply to withdrawals made in previous years.
Withdrawing money paid in before the current tax year
You can withdraw funds from current and previous years' deposits and pay them back into a Nationwide cash ISA (within that tax year), without it counting towards your current year's ISA allowance.
ISA flexibility and transfers
Transferring an ISA offering flexibility to Nationwide
If you transfer your current-year ISA to us, your current ISA manager will tell us how much more you can deposit within the tax year.
Transferring to an ISA manager that doesn't offer flexibility
You will not be able to repay any money (under the rules of ISA flexibility) that is withdrawn after the switch, without it counting towards your annual ISA allowance.
Paying ISA interest into another account
Any interest paid into another savings or current account will count as a withdrawal from the ISA. This means that this money can be paid back into your ISA within the tax year without it counting towards your annual ISA allowance.
Closing an ISA offering flexibility
If you close a Nationwide ISA without replacing all the funds you've withdrawn in that tax year, you can re-open the account with us (within the same tax year) and replace withdrawn funds without it counting towards your annual ISA allowance.