For years, traditional and non flexible ISAs have come with a major limitation – once you withdrew money from your ISA, you couldn’t put it back without it using up your annual allowance. If you had paid the maximum of £20,000 into your ISA in a given tax year and needed to take out £2,000, you wouldn’t be able to replace that money.
This was because you would have paid in the maximum amount allowed under the ISA rules. This limitation made it difficult to count on these savings for emergencies or short-term needs without impacting the annual allowance. And while flexible ISAs have been around since 2016, few providers have offered them.
Why do Flexible ISAs change the game?
Starting from FY 2025, WealthKernel’s Stocks and Shares ISA is now a Flexible ISA, meaning that investors can withdraw money from their ISA and replace it in the same tax year without affecting their current year’s subscription limit.
The flexibility gives investors the confidence to put their savings in ISAs, knowing that they can use these for emergencies without being penalised. WealthKerna is offering third party firms the ability to launch flexible ISAs for there own customers, using its API.
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With a flexible ISA account, investors can deposit the full £20,000 at the start of the tax year, withdraw cash as needed, and then re-deposit the money before the tax year ends, making the most of the tax-free allowance. They also get access to their savings almost immediately without any penalty or setbacks.
Why now?
WealthKernel says it has always aimed to make investing more accessible for everyday investors. Given the economic and political instability we are facing around the world today, WealthKernal says investors should have more adaptable and flexible savings solutions for their money.
With the UK Government considering lowering the cash ISA limit to encourage more people to invest, launching a Flexible ISA could offer a smart alternative for financial advisors. It allows investors to hold their money in cash, withdraw and replace it without losing their annual allowance, and access their funds during emergencies without penalty.
“By adding flexibility to our ISAs, we are helping businesses offer products that are better suited and adaptable to real-life situations and not only help investors stay on track with their money goals and keep their savings replaceable in emergencies,” WealthKernal explained.
The WealthKernal Flexible ISA has been designed to offer clarity and control over ISA subscriptions. The ISA subscriptions endpoint now includes a ‘replaceableAmount’ field that makes it easy to show investors how much money they can put back in.
As an HMRC-registered ISA manager, WealthKernel’s ISA endpoints are fully compliant and ready to help businesses launch and scale their investment propositions.
WealthKernel said this week it has a couple more developments for its Flexible ISA product further down the road.
