how does the Lifetime isa's work?

Jack98 · 16 July 2017 at 12:11AM

I've been saving in help to buy for over a year now and have just over £4000 (£3250 in march) and have 4% interest. i have just heard about lifetime isa.
i wont be buying a home in a few years as im only just going to uni this year. ( im 19)

1. if i open a lifetime isa account is it worth transfering all my money from the help to buy isa as it would mean losing the high interest rates. ?
2. can i transfer my money into the lifetime isa but also keep the help to buy for the high interest rates?
3. also if i transfer £3250 from my help to buy can i only then put £750 to put it up to £4000 or does this not matter and i can put £4000 as well as £3250 = £7250 in first year?
4. if i transfer money all the money in march 2018 will i get the full bonus

thanks for helping

Ed-1 · 16 July 2017 at 9:34AM

Jack98 wrote: »

I've been saving in help to buy for over a year now and have just over £4000 (£3250 in march) and have 4% interest. i have just heard about lifetime isa.
i wont be buying a home in a few years as im only just going to uni this year. ( im 19)

1. if i open a lifetime isa account is it worth transfering all my money from the help to buy isa as it would mean losing the high interest rates. ?
2. can i transfer my money into the lifetime isa but also keep the help to buy for the high interest rates?
3. also if i transfer £3250 from my help to buy can i only then put £750 to put it up to £4000 or does this not matter and i can put £4000 as well as £3250 = £7250 in first year?
4. if i transfer money all the money in march 2018 will i get the full bonus

thanks for helping

1. I'd transfer the balance as it stood on 5th April 2017 only as this doesn't count towards the £4000 LISA limit.
2.Yes - but only if you transfer part of it. If you transfer the full balance the H2B ISA is likely to be closed.
3. No - you can put in another £4000 as well as transfer the balance of the H2B ISA as it stood on 5th April 2017.
4.Yes.

psuc3c · 16 July 2017 at 9:52AM

Hi Jack98,

I'm in a similar position to you, and agree with Ed-1 by waiting until the end of the tax year to transfer the H2B ISA over to a LISA with an extra £4000 so I can gain the better interest rates through H2B. One thing to be aware of is that there is a penalty to withdrawing cash out of a LISA . There is more info about LISAs on MSE website.

how does the Lifetime isa's work?

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