Flexible ISA and non-flexible ISA annual allowance rules

Yawn

I have a version of this question but with the possibility of an ISA transfer added in. 

I currently have a flexible ISA. Within the next month or so, I will need to withdraw 7,000 pounds to pay off a credit card debt (I've been stoozing).

However I've received a notification from my ISA provider that the rate is dropping substantially, to 3.9%.

Am I right in thinking that if I switch to a new provider I cannot replace the 7k as I build up my savings? Because the high water mark won't follow me to the new provider? 

And if that's so, I should switch to another flexible ISA before taking the funds out? Mind you, the best rate I can see is 4,15% so it may not be worth this complication...

slinger2

Yawn said:

I have a version of this question but with the possibility of an ISA transfer added in. 

I currently have a flexible ISA. Within the next month or so, I will need to withdraw 7,000 pounds to pay off a credit card debt (I've been stoozing).

However I've received a notification from my ISA provider that the rate is dropping substantially, to 3.9%.

Am I right in thinking that if I switch to a new provider I cannot replace the 7k as I build up my savings? Because the high water mark won't follow me to the new provider? 

And if that's so, I should switch to another flexible ISA before taking the funds out? Mind you, the best rate I can see is 4,15% so it may not be worth this complication...

As you suspected, when you transfer you lose the right to replace. That right is not transferred.

You could try a partial transfer. That way the old account will stay open and the money can be replaced there. You'd then have to do another transfer.

Also be aware that the rules about flexible ISAs changed in July. The change affects the way you can replace your subscriptions for the current tax year. See other threads about this.

Yawn

Thanks! Very helpful. I wish I hadn't merged all my ISAs now. 😅