Transferring from a Non-Flexible ISA to a Flexible ISA

MeteredOut

I have a Virgin fixed-rate ISA maturing at the end of this month. I've not had any comms from Virgin yet on the options at maturity, but it looks like they don't (currently) provide any Flexible ISAs.

I need access to these funds for a period of time later this year.

If I transfer the ISA to a new or existing flexible ISA with another provider, can I then withdraw those funds from that ISA and redeposit them within the same tax year without utilising this years ISA allowance (which I've already used) or do those funds effectively stay non-flexible within the new ISA, so if I withdraw them, I won't be able to redeposit them?

Or does that vary by provider?

I thought I knew the answer to this, but have read mixed reports. And AI will tell me both answers are correct, depending on how I ask the question

eskbanker

MeteredOut said:

If I transfer the ISA to a new or existing flexible ISA with another provider, can I then withdraw those funds from that ISA and redeposit them within the same tax year without utilising this years ISA allowance (which I've already used) or do those funds effectively stay non-flexible within the new ISA, so if I withdraw them, I won't be able to redeposit them?

The whole point of flexible ISAs is that you can withdraw (any) funds and redeposit them within the same tax year without them counting towards current year contribution allowance, so you may be overthinking this (or I may be misunderstanding what you have in mind!).

clairec666

If you transfer into a flexible ISA then it will be flexible - it won't care where the money came from

MeteredOut

eskbanker said:

MeteredOut said:

If I transfer the ISA to a new or existing flexible ISA with another provider, can I then withdraw those funds from that ISA and redeposit them within the same tax year without utilising this years ISA allowance (which I've already used) or do those funds effectively stay non-flexible within the new ISA, so if I withdraw them, I won't be able to redeposit them?

The whole point of flexible ISAs is that you can withdraw (any) funds and redeposit them within the same tax year without them counting towards current year contribution allowance, so you may be overthinking this (or I may be misunderstanding what you have in mind!).

I'm probably overthinking too.

After searching and finding some ambiguous articles, and ChatGPT saying that if you transfer funds from a non-flexible ISA to a flexible ISA, those funds cannot be withdrawn and redeposited even in the same tax year without impacting that years allowance, I wanted to check.

I know AI makes some very basic mistakes, but it seemed so confident!

MeteredOut

clairec666 said:

If you transfer into a flexible ISA then it will be flexible - it won't care where the money came from

Thanks, that's what I thought but then wanted to double-check after reading a couple of conflicting articles. Since it is a £85K ISA (will be nearer £90K after interest is applied), I didn't want to do the transfer, withdraw it, then lose 4 1/2 years worth of allowance by not being able to redeposit it before next April.

MeteredOut

On a separate note, has anyone had a Virgin fixed rate ISA mature recently - what were the options provided? They only seem to have a fixed rate ISA and a limited withdrawal ISA on their public site, neither flexible.

sammy_zammy

MeteredOut said:

On a separate note, has anyone had a Virgin fixed rate ISA mature recently - what were the options provided? They only seem to have a fixed rate ISA and a limited withdrawal ISA on their public site, neither flexible.

Yes, most providers do not offer flexible ISAs.

MeteredOut

sammy_zammy said:

MeteredOut said:

On a separate note, has anyone had a Virgin fixed rate ISA mature recently - what were the options provided? They only seem to have a fixed rate ISA and a limited withdrawal ISA on their public site, neither flexible.

Yes, most providers do not offer flexible ISAs.

Was surprised they don't even seem to offer an unconstrained easy access ISA. Will be interesting to see what they options they provide for my maturing Fixed Rate ISA.

Ch1ll1Phlakes

Just to confirm what everyone else is saying. Once transferred, any funds in the flexible ISA are treated as flexible. And yes chatgpt can be very confident sometimes until you tell it that it is wrong and then miraculously it says yes it is wrong.   

Note: I've recently checked the ISA offerings from around 90 different providers and I found 39 that provided flexible ISAs of some sort, though you have to check the T&Cs of specific accounts. If you want a list shout and I'll try get the info from my spreadsheet.

Archerychick

MeteredOut said:

On a separate note, has anyone had a Virgin fixed rate ISA mature recently - what were the options provided? They only seem to have a fixed rate ISA and a limited withdrawal ISA on their public site, neither flexible.

The terms of the current fixed ISA states as follows - this doesn’t mean it’s the same for the account you’ve opened, but I’d struggle to think it would be anything else!

• After the fixed rate period your account will become a variable rate Cash ISA. However, we will write to you before the end of the fixed rate period to let you know the options available to you, as well as advising you of the interest rate currently payable on the variable rate account.

You will likely need to transfer out to access the funds flexibly, and I wouldn’t expect the variable rate to be very good compared to what else is available, but I don’t know. 

eskbanker

Virgin states that their easy access cash ISAs are flexible:

Not all ISAs are flexible, however here at Virgin Money our Easy Access Cash ISAs are fully flexible.

https://uk.virginmoney.com/savings/learn/isas/flexible-isa#how-do-easy-access-accounts-work