Withdrawing money from an ISA

Are you looking for information on withdrawing money from your ISA account? Read further to understand rules around ISA withdrawals and how you can do it.

Can I take my money out of an ISA whenever I want?

ISAs are popular because they help you to invest and save tax-free, but also because you can make withdrawals from ISA accounts tax-free.

Money in a Junior ISA cannot usually be accessed until the child turns 18.

Do you pay tax when you withdraw from an ISA?

No, you don’t pay tax on ISA withdrawals and there’s no fee to withdraw cash from your AJ Bell Stocks and shares ISA.

Lifetime ISA withdrawals come with some extra rules on withdrawals, which we’ll cover below.

Withdrawing from different types of ISAs

Here’s how withdrawals from ISA accounts work.

Stocks and shares ISA withdrawals

You can withdraw cash from your AJ Bell ISA at any time, and there is no limit to how much you can take out of an ISA tax-free.

If you want to make a withdrawal, you’ll need to make cash available. This might mean selling some of your investments.

The AJ Bell ISA is not a flexible ISA, so money you take out of your ISA cannot be paid back in if you’ve already reached your annual ISA allowance for the tax year.

Read more about setting up a regular withdrawal for a Stocks and shares ISA.

Lifetime ISA withdrawals

Government rules mean a 25% penalty charge will apply if you withdraw money before age 60, except to purchase your first eligible home. This may mean you get back less from your Lifetime ISA than you put in, especially in the short term.

You can withdraw all the money in your Lifetime ISA account without the 25% government withdrawal charge if you have a terminal illness.

Read more about how you can make a Lifetime ISA withdrawal.

Cash ISA withdrawals

Although some cash ISAs are easy to access, some accounts might limit the number of withdrawals you can make in a year without losing interest.

Fixed rate cash ISAs do not usually allow withdrawals until the end of the fixed term (known as maturity). Accounts that will let you access your cash might require you to close the account and deduct an interest penalty. You should check with your provider what rules will apply.

Junior ISA withdrawals

Junior ISAs are tax-free accounts that are set up and managed by a parent or legal guardian. The child cannot access the money until they turn 18. The person managing the account can take money out if the child becomes terminally ill.

Read more about making withdrawals from a Junior ISA.

What happens when you take money out of an ISA?

If your ISA is ‘flexible’, you can take out cash then put it back in during the same tax year without reducing your current year’s allowance.

The AJ Bell Stocks and shares ISA is not a flexible ISA, so any money you pay back in will count towards your ISA allowance for the current tax year.

You can request a withdrawal from your AJ Bell ISA by logging into your account and selecting ‘Withdrawals’ from the menu options.

Read more about how long it takes to withdraw funds from a Stocks and shares ISA or Dealing account.

The difference between withdrawing and transferring

When you make withdrawals from ISA accounts, cash is paid out tax-free and it leaves the tax-free ISA wrapper.

Transferring is when you move an existing ISA from one provider to another. You can transfer cash and existing investments without having to sell them first. Transferring an ISA doesn’t use up any of your ISA allowance for the year.

Discover how to transfer an ISA