Flexible and non flexible ISAs

moatmeister

Hi

I opened a Moneybox non flexible cash ISA at the beginning of this tax year to park some cash after a property sale. I have (wisely) spent most of this leaving a balance of £500 in this cash ISA.

I am considering transfering this balance into a flexible stocks and shares ISA to have a go at investments via an ISA transfer.

Would this then mean I would be able to put further cash into this new account up to the current £20k Isa limit, or have I already used most of my current year's ISA limit on the original Moneybox cash ISA??

Ch1ll1Phlakes

You have already used the amount of limit you added to Moneybox. As you have withdrawn from a non flexible ISA you have lost the amount that you have withdrawn from your ISA contribution limit for this year. If you had deposited £20k and have withdrawn all bar the £500 you now only have that £500 left of your limit and cannot add anymore you can only transfer.

moatmeister

Thanks. So on that basis, it seems it doesn't matter whether I transfer into a flex or non flex stocks and shares ISA because either way, I can't directly add to it. Is that correct??

clairec666

moatmeister said:

Thanks. So on that basis, it seems it doesn't matter whether I transfer into a flex or non flex stocks and shares ISA because either way, I can't directly add to it. Is that correct??

Correct, you won't be able to add to it in this tax year. You might want to think ahead to next year, and whether you want it in a flexible ISA in future, but there's plenty of time to switch again further down the line.

Albermarle

The idea is that investments you hold in a S&S ISA are for the long term, and you should not be withdrawing money from it for short term needs.
So in this case maybe a non flexible one is better, to reduce the temptation to use it like an easy access savings account.

Ch1ll1Phlakes

moatmeister said:

Thanks. So on that basis, it seems it doesn't matter whether I transfer into a flex or non flex stocks and shares ISA because either way, I can't directly add to it. Is that correct??

Correct. The only reason you may want to transfer to a flexible stocks and shares isa is for the possibility of withdrawing the £500 with the idea to replace it before the end of the tax year. However, I think you'd probably be unlikely to do this for £500.

Just a live and you learn situation. Hopefully, if you fund an ISA in the next tax year, you fund a flexible one if you're looking to make withdrawals. 

moatmeister

Thanks yes this has all been a planned process, next year is another year when more funds will be available. After all the sums completed have ended up with £500 spare in the isa which I thought I would try my hand at investing with for at least the next 5+ years. It was not about the ability to withdraw it, more about the ability to add to it. Im 61 so feel the need to make the most of the available allowances!