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Withdrawing funds from an ISA

You can take money out of most ISAs whenever you want, without affecting the tax benefits. However, some types of ISAs have specific rules and costs around withdrawing, like the Lifetime ISA (LISA). Certain providers may even charge you to make a withdrawal – so always check the terms before you sign up.

What happens when you withdraw money from an ISA?

For most ISAs, when you withdraw money from it, that part of your allowance remains used. 

If you contribute £20,000 to an ISA during the current tax year, you have used all of your annual allowance, and this remains the case even if you make a withdrawal in the same tax year. In most cases, other than flexible ISAs, you would need to wait until the next tax year for your annual allowance to reset. J.P. Morgan Personal Investing does not offer flexible ISAs.

Withdrawing from different types of ISA

For most ISA types, the withdrawal rules are the same – you can take money out whenever you want. However, some types of ISA have specific rules. 

If you have a Lifetime ISA, you can withdraw money in three cases only:

  • to buy your first home, up to £450,000 (currently)
  • once you’re 60 or older
  • if you’re terminally ill, and have less than 12 months to live.

If you withdraw from a Lifetime ISA for any other reason, you will pay a 25% government withdrawal charge on the amount you withdraw.

If you have a fixed-rate Cash ISA, you may be unable to access your money during the fixed term, although your provider will have specific rules around withdrawals, partial withdrawals and early closure. There will most likely be charges or penalties associated with taking money out of your ISA during the fixed term.

If you have a flexible cash ISA or flexible Stocks and Shares ISA, you can withdraw money and put it back in during the same tax year without reducing your current year’s allowance. 

No matter which type of ISA you have, always check the rules and costs associated with withdrawing from it with your provider first. 

Withdrawing funds from a J.P. Morgan Personal Investing Stocks and Shares ISA

If you have a J.P. Morgan Personal Investing Stocks and Shares ISA, we don’t charge you a fee for any withdrawals.  

If you have a J.P. Morgan Personal Investing Lifetime ISA, we won’t charge you to withdraw money either. However, you will be charged a 25% government penalty if you take money out before you’re 60 and it’s not to put towards your first home up to a value of £450,000 or because of a terminal illness.

It’s important to remember that, for both these types of ISA, the money you take out can’t be put back into an ISA in the same tax year – that part of your ISA allowance can’t be used again.

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Risk warning

As with all investing, your capital is at risk. The value of your portfolio with J.P. Morgan Personal Investing can go down as well as up and you may get back less than you invest. Tax rules vary by individual status and may change. This is general information, not personalised tax advice. If you need to withdraw the money in your LISA before you’re 60, and it’s not for a qualifying purchase of a first home, you may pay a 25% government withdrawal charge. If you choose to opt out of your workplace pension to pay into a Lifetime ISA, you may lose the benefits of the employer-matched contributions. Your current and future entitlement to means-tested benefits may also be affected.