Split ISA?

becabubble
becabubble Posts: 6 Forumite
in ISAs & tax-free savings
Hi all

I'm wanting to get a Help to Buy ISA as my partner and I are looking to move in together in the next year or so, but I'm new to this!

I have a cash ISA with Barclays at the moment, with around £5k, which I pay into when I'm paid each month, and also withdraw from to pay for bigger things like holidays.

I know that there are split-ISAs mentioned on this site where you can have both a cash ISA and a Help to Buy ISA element.

Can anyone (simply) explain how it works in terms of the £200 you can pay into the Help to Buy part and then the Cash ISA part? How would it work if I want to make withdrawals from the Cash ISA?

Also, is it worth me going down that route, or just getting the best Help to Buy ISA and putting the rest of my savings into my current account for now?

Thanks in advance
Becky

Comments

  • Alexland
    Alexland Posts: 9,653 Forumite
    First Anniversary Photogenic Name Dropper First Post
    edited 15 February 2018 at 3:07PM
    UK resident adults can contribute up to £20k each into ISAs in a tax year which ends on the 5th April each year.

    So if only doing a Split Cash ISA with a single provider then the amount you can contribute into the cash part would be £20k minus the amount you have contributed into the HTB ISA part. You are fine to make withdrawals from the Cash ISA but if it is not a Flexible ISA then you cannot make deposits back in again without using more of your annual allowance.

    It's worth considering the Lifetime ISA from Skipton Building Society as you can each add up to £4k in each tax year (no monthly limits) for a 25% bonus. You could then add £16k to another type of ISA elsewhere to get to your £20k annual allowance. For example if you added £4k this tax year and £4k from 6th April you would have £8k plus £2k as a government bonus. The LISA needs to be open 12 months from the initial contribution date before it can be used with bonus towards a property purchase without penalty.

    Alex.
  • KJaye
    KJaye Posts: 1 Newbie
    I have an existing cash ISA and have set up a help to buy ISA last summer. Can I put into both of these in the same tax year if they aren't split?
    They are not with the same bank.
    I am regularly putting into the help to buy every month but wasn't sure if I am still allowed to put into my cash ISA too?
  • Alexland
    Alexland Posts: 9,653 Forumite
    First Anniversary Photogenic Name Dropper First Post
    edited 16 February 2018 at 7:52AM
    No you can only contribute to one per tax year so if you have already contributed to the HTB ISA you cannot contribute to the Cash ISA with another provider.

    You can however leave your old Cash ISA with another provider (or move it to a new provider without making further contribution) and open and contribute to another Cash ISA with your HTB ISA provider if they offer them as a Split Cash ISA.
  • eskbanker
    eskbanker Posts: 30,983 Forumite
    First Anniversary Name Dropper Photogenic First Post
    KJaye wrote: »
    I have an existing cash ISA and have set up a help to buy ISA last summer. Can I put into both of these in the same tax year if they aren't split?
    They are not with the same bank.
    I am regularly putting into the help to buy every month but wasn't sure if I am still allowed to put into my cash ISA too?
    Unless you're likely to be buying a property within the next year, you'd probably be better off with a Lifetime ISA if you have more surplus money than fits into a HTB, as it offers a higher annual allowance (and a higher property value cap outside London).
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