ISA savers will soon have the flexibility to be able to take money out of their ISAs and put it back in, without it counting towards the annual ISA allowance, Chancellor George Osborne has announced today.
Currently, the ISA allowance is £15,000 (£15,240 from 6 April), and once you've deposited that amount, you can't put any more in during the same tax year, even if you make a withdrawal. See Top Cash ISAs for more on the current rules and top rates.
The changes, which will come into effect from autumn 2015, will mean that savers who need access to their ISA cash are not then penalised if they then want to save more later on that tax year.
The only limit is that you need to top up your ISA during the same tax year the withdrawal was made – if you don't it will count towards your new allowance.
However, with the introduction of a new personal savings allowance which is set to take almost 95% of people out of paying tax on savings interest altogether when it's launched in April 2016, for many, these new ISA freedoms will not be needed. (See Savers to get £1,000 personal allowance before interest is taxed news story).