MSE News: Budget 2015: ISAs to become fully flexible with withdrawals allowed

Linhurst

I have found some providers explicitly do not to offer any "flexible ISA allowance" so there are no standard rules.

The "annual ISA allowance" is the amount of 'new' savings you may pay into ISAs each tax year set by the Government. The new flexible ISA allowance appears to be an option providers may choose to offer in addition to the annual ISA allowance.

Coventry BS website makes the following statements:

“If your ISA becomes flexible, your annual ISA allowance will be 'flexible' because you can pay in and take money out as many times as you like, as long as you never go over your annual ISA allowance.”

“What is the flexible ISA allowance? This is the amount of previous years' ISA savings you've taken out of your flexible ISA in the current tax year, which you may replace if you wish. On 6 April every year, your flexible ISA allowance will be reset at zero.”

masonic

Linhurst wrote: »

Coventry BS website makes the following statements:

“If your ISA becomes flexible, your annual ISA allowance will be 'flexible' because you can pay in and take money out as many times as you like, as long as you never go over your annual ISA allowance.”

“What is the flexible ISA allowance? This is the amount of previous years' ISA savings you've taken out of your flexible ISA in the current tax year, which you may replace if you wish. On 6 April every year, your flexible ISA allowance will be reset at zero.”

Coventry is the only provider I've seen make an affirmative statement about flexibly withdrawing previous years subscriptions. This is in line with the ISA rules.

Others, such as Nationwide, appear to have adopted the position that only current year money can be flexibly withdrawn.

But, yes, offering flexibility is entirely optional, so the ISA provider can allow it within limits they define if they wish.

colsten

I can see this whole flexibility business leading to tears as some people won't be reading / understanding the T&Cs and make up their own rules. When it comes to re-deposit time, they may/will be surprised when the provider's rules aren't quite in line with their own, made-up, rules.

jamesd

The Skipton Building Society is offering the flexible features for past year money and transfers from S&S ISA for their variable rate ISA products. Verified by phone last week.

MDMD

jamesd wrote: »

The Skipton Building Society is offering the flexible features for past year money and transfers from S&S ISA for their variable rate ISA products. Verified by phone last week.

Although it would be helpful if their website explicitly stated that they allow previous year withdrawals

http://www.skipton.co.uk/savings/isas/flexible-isas

Ashen

This is what the Lloyds FAQ on Flexible ISAs says (and that some of their ISAs will be flexible, Cash ISA Saver and Instant Cash ISA):

If I transfer my ISA to another provider, or transfer my ISA from another provider to Lloyds Bank, can I replace any previous years’ subscriptions I have withdrawn in the current tax year?

Any previous years’ subscriptions that have been withdrawn must be replaced before you request an ISA transfer. Current year’s subscriptions can be replaced following the transfer as long as they are replaced in the same tax year that they were withdrawn. You can also deposit up to the annual ISA allowance (less any amount invested in a stocks and shares or innovative finance ISA).

https://www.lloydsbank.com/savings/personal-savings-allowance.asp

I just want to know that I can transfer a maturing fixed-rate Santander ISA over, and then withdraw/replace the cash.

10_66

Good grief, it's enough to drive you insane! I've just spent ages sorting out transferring previous years' and current year's ISAs to a "flexible" ISA provider, I rang and asked them to confirm in email, which they did (and they're all still in process of being transferred). Now it seems then that it may not be fully flexible then?. I didn't realise I had to specify to the new Provider if flexibility applied to previous years' as well as current, because I'd have hoped they'd have made clear the difference on asking them.

masonic

Ashen wrote: »

This is what the Lloyds FAQ on Flexible ISAs says (and that some of their ISAs will be flexible, Cash ISA Saver and Instant Cash ISA):


https://www.lloydsbank.com/savings/personal-savings-allowance.asp

I just want to know that I can transfer a maturing fixed-rate Santander ISA over, and then withdraw/replace the cash.

That's how flexible ISAs are supposed to work (i.e. Lloyds is not implementing a watered down version), so you should be fine.

Hopefully TSB will adopt the same position as I'd already initiated a transfer of my HSBC ISA to them before some of these specific statements had been posted.

masonic

10_66 wrote: »

Good grief, it's enough to drive you insane! I've just spent ages sorting out transferring previous years' and current year's ISAs to a "flexible" ISA provider, I rang and asked them to confirm in email, which they did (and they're all still in process of being transferred). Now it seems then that it may not be fully flexible then?. I didn't realise I had to specify to the new Provider if flexibility applied to previous years' as well as current, because I'd have hoped they'd have made clear the difference on asking them.

It's worse than that because you can't believe anything a customer service advisor tells you - they regularly get things wrong in relation to ISAs, so until providers put it in black and white on their website, or preferably in the T&Cs of their accounts, there are no guarantees.

Ashen

masonic wrote: »

That's how flexible ISAs are supposed to work (i.e. Lloyds is not implementing a watered down version), so you should be fine.

Hopefully TSB will adopt the same position as I'd already initiated a transfer of my HSBC ISA to them before some of these specific statements had been posted.

Thanks, it's just curious that they don't actually mention or address the issue of withdrawing and replacing previous years subscriptions after the transfer to them.

They only mention that you can do it with current years subscription, and that you need to replace previous years subscription before a transfer happens. Nothing at all mentioned about previous year withdrawals after the transfer.