Do I lose my ISA allowance if I withdraw money?

Full answer

Whether withdrawing money costs you ISA allowance depends on whether your ISA is a flexible ISA. The annual ISA allowance for 2026/27 is £20,000, and normally every pound you pay in counts towards it. With a non-flexible ISA, once you have used allowance by paying money in, withdrawing that money does not give the allowance back. So if you paid in £20,000, then took out £5,000 and tried to pay it back in the same tax year, the repayment would count as new subscriptions and push you over your limit, because the original £20,000 already used the whole allowance. With a flexible ISA, the rules are more generous. You can withdraw money and replace it within the same tax year without it counting again towards your allowance, as long as you replace it by the end of the tax year. For example, if you paid in £20,000, withdrew £5,000 and later replaced that £5,000, you would still be within your allowance because the flexible feature restores the withdrawn amount. Not all ISAs are flexible, and the feature is more common on cash ISAs than on stocks and shares ISAs, so you need to check with your provider. Lifetime ISAs are never flexible, and withdrawing from a Lifetime ISA other than for a first home or after age 60 also triggers a 25% government penalty. Replacements into a flexible ISA must go back into the same ISA you took the money from in many cases, so check the provider's rules. Use an ISA calculator to plan your contributions and avoid accidentally exceeding the £20,000 limit.

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Related guides

• Isa Types Explained

More answers

• What is a flexible ISA?
• Does an ISA transfer count towards my annual allowance?