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Tax-free savings with flexibility
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Flexible ISAs

Experience the freedom of tax-free savings with our flexible cash ISAs. Save up to £20,000 per year completely tax-free while enjoying the unique flexibility to withdraw and replace your money within the same tax year without losing your ISA allowance. 

Flexible Easy Access ISA
Interest rate gross/tax-free p.a./AER* 1.90%
Type of account
Withdrawals Unlimited
Open with £1
Open and manage
  • Branch
More details
Account Name Interest rate
gross/tax-free p.a./AER*		 Type of account Withdrawals Open with Open and manage
Flexible Easy Access ISA 1.90%
  • Flexible ISA
  • Cash ISA
 Unlimited £1
  • Branch
 More details

What is a flexible ISA?

A flexible ISA is a cash ISA that gives you more freedom with your savings. if your circumstances change, it allows you take money out and put it back in — without affecting your annual ISA allowance, as long as it’s done within the same tax year and replaced back into the same account.

How does a flexible ISA work?

Let’s run through the ISA basic rules first:

  • Everyone gets an annual ISA allowance per tax year .
  • A tax year starts from 6th April to the 5th April the following year.
  • For the current tax year, you can save up £20,000 in cash ISAs.

With a standard cash ISA, if you withdraw money, that amount still counts towards your annual ISA allowance for the tax year, and you can't replace it.

Flexible ISA rules:

With a flexible ISA, the rules are different.

Example: Let’s say:

  • For the current tax year your ISA allowance is £20,000, and if you pay in £5,000 into your flexible ISA.
  • You then withdraw £2,000.
  • You can still pay in up to £17,000 that same tax year (April 6th - April 5th) as long as your ISA is flexible.
  • Your remaining £15,000 allowance, plus the £2,000 you took out.
  • When you withdraw from a flexible ISA, that money can be replaced without it reducing your annual ISA allowance.

Just remember:

  • The money must be replaced in the same tax year.
  • It must go back into the same account, with the same provider.

ISA allowance: standard cash ISA vs flexible ISA

Here’s a step-by-step example of how your ISA allowance is affected when you deposit and withdraw money in a flexible vs standard cash ISA.

Step 1: You open and pay in £5,000 into your ISA account

Standard cash ISA Flexible cash ISA
  • £5,000 of your £20,000 ISA allowance has been used.

£5,000 of your £20,000 ISA allowance has been used.


Step 2: You withdraw £2,000 in the same tax year

Standard cash ISA Flexible cash ISA
  • £5,000 of your £20,000 ISA allowance has been used.

    You may be subject to a withdrawal penalty depending on the standard cash ISA you have. Check with your provider first    .
  • Counts as £3,000 used of your £20,000 ISA allowance limit.
  • £17,000 remaining to use.


Step 3: You pay the £2,000 back later in your account in the same tax year

Standard cash ISA Flexible cash ISA
  • Now £7,000 used – only £13,000 left of your ISA allowance remaining for the tax year.
  • Still only used £5,000 of your ISA allowance in the same tax year you opened your flexible ISA. You have £15,000 left.

 

Pros and cons for a flexible ISA

Pros:

  • Withdraw and replace money without affecting your allowance.
  • More flexibility if life or plans change.
  • Ideal for savers who may need access to funds, providing you haven’t invested in a fixed rate account.
  • Tax-free savings up to £20,000 a year.

Cons:

  • Withdrawals must be replaced in the same tax year.
  • Flexibility is lost if transferred to a non-flexible ISA.
  • Doesn’t apply to fixed rate ISAs, LISAs, or Junior ISAs.

What flexible ISAs do Nottingham Building Society provide?

Take a look at the table at the top of this page to see the current range of flexible ISAs that are on offer.

With our flexible ISAs, you can:

  • Save up to £20,000 tax-free (subject to eligibility).
  • Withdraw and replace money freely during the tax year.
  • Enjoy peace of mind knowing your savings are flexible if you need them.

You’ll need to be:

  • Aged 16 or over.
  • A UK resident.
  • Have a National Insurance number.

What’s the difference between a fixed rate ISA and a flexible ISA at Nottingham Building Society?

A fixed rate ISA:

  • Offers a guaranteed interest rate over a set term.
  • We don’t allow withdrawals on our fixed rate ISAs, but you can transfer them subject to an interest penalty.
  • Cannot be flexible

A flexible ISA:

  • Offers a variable rate (which can go up or down).
  • Lets you withdraw and replace money during the same tax year.
  • Keeps your ISA allowance intact, as long as the flexible ISA rules are followed.

Frequently asked questions

Can I open a flexible ISA online?

No, currently you can only open our flexible ISAs in one of our branches.

Can I transfer my ISA to a flexible ISA?

Yes. You can transfer both current and previous years’ ISA savings into a flexible ISA with us. However, if you’ve already withdrawn money from another provider before transferring, that money can’t be replaced once the transfer is complete.

How is a flexible ISA different to a non-flexible ISA?

The key difference is what happens when you withdraw money.

With a non-flexible ISA, any money you take out still counts towards your annual allowance - even if you pay it back in.

With a flexible ISA, that’s not the case. You can take money out and replace it in the same tax year, without losing any allowance.

Does taking money out affect my ISA allowance?

Not with a flexible ISA. You can take money out and replace it within the same tax year without it counting twice.

What happens if I withdraw from my flexible ISA?
  • If you withdraw money and then pay it back into the same account in the same tax year and the account is still open, it doesn’t affect your ISA allowance. If you don’t replace it, or try to pay it into a different ISA, it will count towards your limit.
  • At Nottingham Building Society you don’t have to provide us any notice before you withdraw money from your flexible ISA.
How do flexible ISA withdrawals work?

This is a flexible Cash ISA, which means you can withdraw money and pay it back in without affecting your ISA allowance, as long as it’s done in the same tax year. Some important points to note about flexible ISAs are:

  • Flexibility applies to both current and previous years’ ISA subscriptions, but these are treated differently.
  • If you withdraw your current year’s allowance, you can transfer to a flexible ISA with another ISA provider and replace the funds with them.
  • If you transfer your full ISA balance to another ISA provider, you will lose your tax-free benefits for any previous years’ ISA allowances that you have withdrawn and not paid back in before the account closes.
  • Any flexible ISA withdrawals requested will be taken from the current year’s ISA funds (if any) first, followed by previous years’ ISA funds. When you pay back in (flexible ISA replacement subscriptions), previous years’ funds will be replaced first, followed by the current year’s funds. Where you have replaced both previous tax year and current tax year subscriptions, any further money which you deposit will count towards your annual ISA allowance limit.
  • If you close your account, you will not be able to make any further flexible ISA replacement deposits.
Will I have to pay a fee for withdrawals?

No. You can take money out whenever you like, with no penalties or charges.

What happens if I don’t pay the money back in the same tax year?

If you don’t replace it by the end of the current tax year, that amount will count towards your annual ISA limit, and you won’t be able to repay it.

A flexible ISA could be a great option if you want the reassurance of tax-free saving, with the added peace of mind that you can access your money if you need to - without losing out on your full allowance. It’s savings that adapt to life, not the other way round.

The content on this page is for reference, this is intended as a summary only and should not be interpreted as legal or financial advice given by Nottingham Building Society.  You’ll need to consider and make your own decisions. If you have any questions, we recommend seeking legal and/or financial advice. You can receive impartial finance advice from MoneyHelper

Good to know

Your savings are covered by the Financial Services Compensation Scheme (FSCS), so your savings are protected. The scheme was set up by the Government and is funded by the industry. Savers are protected up to £85,000 if their bank or building society goes out of business.

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