ISA cash-out policy

Hi all!
I am new to the Freetrade ISA account. I was wondering what happens after the 5th of April with the 2020-2021 ISA assuming that you managed to contribute the full £20000 to it. In particular if I want to withdraw money after the 5th of April 2021. How will that work? I am asking this as I plan to keep on depositing money after the 5th of April 2021 into the allowance for 2021-2022. Will I get the option to choose which ISA to withdraw from? Obviously I do not want to lose any of the available allowance from the 2021-2022 ISA.

Not 100% sure on your question but here are the basics.

You get a £20k subscription allowance each tax year. This is how much you can deposit into all ISAs combined.

Next tax year that allowance is reset. You do not need a new S&S ISA, your allowance for your existing one is reset for the new year.

You can choose to keep using that isa or open a new one elsewhere.

You can take money out of your ISA at any time but generally once you do it’s outside of the ISA wrapper and putting it back in counts towards your allowance.

Thanks for the reply Eden. What I meant is this situation. Say I deposit £20.000 into this year’s ISA up to the maximum allowance. Then after April the new ISA allowance starts. Then I go on and deposit another £5000 into the 2021-2022 allowance. At this point if I withdraw money will it count towards 2021-2022? Is there any way I can withdraw from the 2020-2021 funds without affecting the new allowance?

Hope this makes more sense.


You can withdraw what you want when you want.

You can only put up to 20k in a year.

Withdrawing doesn’t impact your deposit allowance - it’s nothing to do with it.

There is something called a Flexible ISA - which means if you put in £20k and withdrew £20k - you could put another £20k back in in the same tax year. But I am not sure if the FT ISA is ‘flexible’ - they would need to clarify.

S&S ISAs aren’t usually flexible. So in this case it has no impact.

If you put 4K in next tax year and withdraw 12k, you’ve still used 4K of your allowance.

If you withdraw 12k but add no money next year you still have 20k of unused allowance

There are quite a lot of Flexible S&S ISA’s on the market - it would be nice if FT could confirm…?

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I’d suggest adding your voice [Feature Request 🔧] Flexible ISAs 🤸

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