LISA or H2B?

Clewoppa · 8 February 2018 at 7:46PM

Hi Newbie here, I'm a little confused over which ISA my 2 children should invest in? They will both be receiving a £1k lump sum and a further £1K (poss spread over a year) from relatives shortly. Both qualify for either ISA age wise etc. 2 situations - my son in lives in Brighton, after the initial £2k will probably only afford to invest only approx £50 a month of his own money for at least a couple of years. My daughter lives in Liverpool, she's still studying so therefore probably won't be able to invest any of her own money for approx 2 years.
1) Am I right in thinking that if they invested in the H2B ISA they would have to nominate a regular amount to save but with the LISA it can fluctate (also accomodate any future lump sums)?
2) Can you have investment breaks ie where you don't pay anything in for a period?
3) I'm thinking the H2B max property price will be too low by the time my son can afford to buy in Brighton?
4) daft question alert!! Can the max bonus be accrued over say 6 years? (in most of the info it talks about max investment over 4 years but assuming if you dont max invest you can stretch it out over a longer period)
I'd be grateful for any advice - thanks

margaretx9 · 8 February 2018 at 7:55PM

Firstly given your kids aren't planning to buy imminently the life time isa makes more sense. And given the £250k limit for the HTB isa it would be little use in Brighton.

The lifetime isa allows you to invest £4000k a year and get a £1k bonus - even if you never buy a house although if you don't you cannot withdraw the cash penalty free until age 60. The help to buy isa is limited to £2,400 a year (plus a £1000 lump sum in month 1) - and you only get a bonus if you buy a house valued at £450k or less in London (the 33 London boroughs) and £250k or less elsewhere with a mortgage.

You must open a help to buy isa by 2019 on current rules - but you don't have to claim the bonus until 2030. The lifetime isa is indefinite - although any future government could of course stop both schemes at any time although that's unlikely.

You can invest as little as you like but no more than the limits above each year. You can also stop and start at any time.

I would suggest the lifetime isa is a better bet for both your kids.

LISA or H2B?

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