H2B or wait for LISA?

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  • ValiantSon
    ValiantSon Posts: 2,586 Forumite
    edited 21 February 2018 at 7:44PM
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    Ed-1 wrote: »
    The reason why you can't pay into both a H2B ISA and another cash ISA in the same year is because you can't pay into 2 cash ISAs in the same year.

    https://www.halifax.co.uk/isas/cash-isas/help-to-buy-isa/

    Remember, the Help to Buy: ISA is a cash ISA and you can only add contributions into one cash ISA in a tax year.

    I'm still not saying that you are wrong, but the link you provided doesn't illustrate or confirm the claim that you can pay in to a JISA and a HTB ISA in the same year. I know that HTB is a form of cash ISA. You may be completely correct, but I would appreciate seeing some evidence to support what you say as I am not completely convinced.

    EDIT: Answered by CricketLady
  • ValiantSon
    ValiantSon Posts: 2,586 Forumite
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    CricketLady wrote: »
    On this page https://www.moneysavingexpert.com/savings/help-to-buy-ISA?_ga=2.17738236.432031731.1517755402-1384030422.1513203526

    it says "Can 16 & 17 year olds have a Help to Buy ISA and a Junior ISA at the same time?

    We checked this with HMRC and it told us that just as you can have a 'normal' cash ISA and a junior ISA at the same time if you're aged 16 or 17, the same applies with a Help to Buy ISA."

    but being a technophobe if this doesn't work simply go to the main website and then the Mortgages and Homes tab then "Help to buy ISAs" choice. Hope this is right, it's been a long day and I think I'm about to have dreams about ISAs!

    Best wishes, CricketLady

    Thank you, that answers my question.
  • Ed-1
    Ed-1 Posts: 3,892 Forumite
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    ValiantSon wrote: »
    I'm still not saying that you are wrong, but the link you provided doesn't illustrate or confirm the claim that you can pay in to a JISA and a HTB ISA in the same year. I know that HTB is a form of cash ISA. You may be completely correct, but I would appreciate seeing some evidence to support what you say as I am not completely convinced.

    EDIT: Answered by CricketLady

    It's not just a form of cash ISA, it is a cash ISA.

    The ISA regulations define 4 types of ISA:
    A cash ISA
    A stocks and shares ISA
    An innovative finance ISA
    A lifetime ISA.

    You can pay into one of each in a tax year, subject to an overall ISA allowance of £20,000 and LISA allowance of £4,000 (the H2B ISA conditions are set out in the scheme rules that providers must incorprorate into their terms and conditions, not in legislation).
  • ValiantSon
    ValiantSon Posts: 2,586 Forumite
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    Ed-1 wrote: »
    It's not just a form of cash ISA, it is a cash ISA.

    That's just being pedantic to the nth degree. It is a form of cash ISA. There is nothing incorrect about that statement.
    Ed-1 wrote: »
    The ISA regulations define 4 types of ISA:
    A cash ISA
    A stocks and shares ISA
    An innovative finance ISA
    A lifetime ISA.

    You can pay into one of each in a tax year, subject to an overall ISA allowance of £20,000 and LISA allowance of £4,000 (the H2B ISA conditions are set out in the scheme rules that providers must incorprorate into their terms and conditions, not in legislation).

    The question has already been helpfully answered.
  • CricketLady
    CricketLady Posts: 43 Forumite
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    MallyGirl wrote: »
    This is actually quite a good one as you have to be under 18 to open it but can keep it going till age 23.

    Can you tell I have a 16 yr old?


    Hi Mally girl,

    Did you know that children of 16 can get the Santander 5% regular saver? This is 200pounds per month and of course because it is an "adult" one you can keep opening a new one each year for as long as you want! Good luck!

    :beer:
  • MallyGirl
    MallyGirl Posts: 6,619 Senior Ambassador
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    Thanks - I did look at that one and it wasn't clear. She has a mini 123 which will convert to a student one when she goes to uni. I am trying to walk the line between getting the best returns for her and her finding out how much money there is waiting for her when she turns 18
    I’m a Senior Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
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  • aj23_2
    aj23_2 Posts: 1,155 Forumite
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    Depends if you live somewhere where houses are less than £250k (£450k in London)

    HTB is easy access, no penalty for withdrawing, only for mortgage deposit up to £250k, can deposit into it until 2030.

    LISA is only for house/mortgage deposit up to £450k or for pension substitute post 60. You will not be able to easy this money for anything else, unless you pay a 25% penalty of your contribution.

    Both will generate a bonus of £3,000 for the first three years if you maxed both.

    I have both of these, and max them. I live outside London but can't get anything for less than £250k.

    So, I use HTB for the interest (4%) and LISA for a deposit. I have a separate work pension. I would probably put what I've saved in my HTB toward a deposit as well, just not claim the bonus for that one.

    Saving into HTB would be £200 a month, and LISA £333.33 a month (if you want to max them).

    Another option would be to open the HTB now, get about £4,000 saved, and then transfer it to a LISA when 18. But really depends on where you live, how much you can afford to save a month and if you want it to be easy access or restricted access.
  • eskbanker
    eskbanker Posts: 31,034 Forumite
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    aj23 wrote: »
    HTB is easy access, no penalty for withdrawing, only for mortgage deposit up to £250k, can deposit into it until 2030.

    LISA is only for house/mortgage deposit up to £450k or for pension substitute post 60. You will not be able to easy this money for anything else, unless you pay a 25% penalty of your contribution.

    Both will generate a bonus of £3,000 for the first three years if you maxed both.
    Could you clarify what you mean by that last comment please, as it's not obvious? I can see how £3K bonus is achievable from a LISA in three tax years but don't get the role of the HTB in whatever scenario you're painting....
  • MallyGirl
    MallyGirl Posts: 6,619 Senior Ambassador
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    Either might have been a better word than Both.

    Still not quite right. At the end of 3 years with Barclays HTB @ 2.53% you would have approx £8500. 25% of that would be a bonus of £2125
    I’m a Senior Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
    & Credit Cards boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.
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  • aj23_2
    aj23_2 Posts: 1,155 Forumite
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    MallyGirl wrote: »
    Either might have been a better word than Both.

    Still not quite right. At the end of 3 years with Barclays HTB @ 2.53% you would have approx £8500. 25% of that would be a bonus of £2125

    Yes.

    I correct myself to a balance of £12k in both deposited by the saver will generate a bonus of £3k on both. HTB just takes a bit longer to reach £12k. But after three years, it's only a difference of about £800 in terms of the bonus achievable..

    I'm basing mine off of 4%, as I have the Santander Issue 1 in April 2016, however some people would have opened in December 2015 (if they weren't prescribing to an ISA in that tax year, whereas I was) and would have a balance of £800 more than me and others who opened in April 2016.
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