How the ISA allowance works
There are four types of ISAs for adults. The total amount you can save in ISAs in the current tax year is £20,000. This is known as the ISA allowance.
You can only put money into one cash ISA and/or one stocks and shares ISA and/or one lifetime ISA and/or one innovative finance ISA in each tax year. This includes ISAs held outside the Halifax.
Some cash ISAs are flexible. This means that you can withdraw and replace your money without affecting your yearly ISA allowance, as long as you replace the funds within the same tax year.
- For example, if you pay a total of £10,000 into a cash ISA this tax year, you would then have another £10,000 that you could pay in to reach your maximum yearly £20,000 allowance.
- If you then withdraw £2,000, leaving £8,000 in your cash ISA, you could put £2,000 back into your account and still have £10,000 of your allowance remaining for the tax year.
Your ability to withdraw and replace funds depends on the type of ISA you have. For example, you could withdraw £500 from your Help to Buy: ISA but the maximum you can pay back in to this type of account is £200 per month.
Also, bear in mind that you can't carry any unused allowance over to a new tax year. The ISA allowance simply resets back to the annual limit again on 6th April.
