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  • FIRST POST
    • AbbieA
    • By AbbieA 13th Mar 17, 1:10 PM
    • 27Posts
    • 9Thanks
    AbbieA
    Help to Buy or Lifetime ISA??
    • #1
    • 13th Mar 17, 1:10 PM
    Help to Buy or Lifetime ISA?? 13th Mar 17 at 1:10 PM
    Should be a fairly straight forward query but I am struggling with the Maths behind this. Situation is as follows:

    Me and my partner are saving to buy a together house in April/May 2018. We currently both have help to buy ISA's. Mine currently has £2400 and his has £3600 (both plus interest). We can both make the maximum payments on either the HTB ISA's or Lifetime ISA's. Would we be better off transferring everything into Lifetime ISA's?

    Reasoning below:
    Sticking with HTB ISA's until May 18 - £6000 (current) + £6000 (14 months) + interest + £3000 Government Contribution = £15000+
    Switching to Lifetime ISA's from April 17 to May 18 - £6000 (current) + £8000 (12 months) + interest + £3500 Government Contribution = £17500+

    Open questions:
    • Can you transfer your full HTB ISA into a Lifetime ISA to open it?
    • Will this accrue the 25% government contribution over the first year?
    • Will I also be able to pay in £4k on top of this and will that £4k also accrue the 25% government contribution?
    • Are my reasonings above correct?
Page 1
    • Heather2603
    • By Heather2603 13th Mar 17, 2:35 PM
    • 57 Posts
    • 62 Thanks
    Heather2603
    • #2
    • 13th Mar 17, 2:35 PM
    • #2
    • 13th Mar 17, 2:35 PM
    We've been looking at this too. If you are able to leave the money in a year then switch to the lifetime ISA, this link helps and there is a video kicking about somewhere too. http://blog.moneysavingexpert.com/2016/04/01/the-help-to-buy-isa-v-lifetime-isa-which-should-first-time-buyers-get/
    • AbbieA
    • By AbbieA 14th Mar 17, 8:25 AM
    • 27 Posts
    • 9 Thanks
    AbbieA
    • #3
    • 14th Mar 17, 8:25 AM
    • #3
    • 14th Mar 17, 8:25 AM
    We've been looking at this too. If you are able to leave the money in a year then switch to the lifetime ISA, this link helps and there is a video kicking about somewhere too.
    Thanks, having a look through though I can't see any info on whether or not we would be better off in the short term (ie 1-2 years). There isn't much clarity on what happens to the bonus contribution you've already accrued on the HTB ISA if you transfer in, or how that affects your £4k annual allowance?
    • Heather2603
    • By Heather2603 14th Mar 17, 8:39 AM
    • 57 Posts
    • 62 Thanks
    Heather2603
    • #4
    • 14th Mar 17, 8:39 AM
    • #4
    • 14th Mar 17, 8:39 AM
    You can transfer it across and still accrue the 25%, the video Martin Lewis did explained it so well. In your situation I'd go with the lifetime. If you are not going to be needing the money until next May.

    Ha ha! Knew I'd fine the video https://www.youtube.com/watch?v=77GEhLNDoAc&feature=youtu.be here you go, explains it so much better than I ever will!
    • AbbieA
    • By AbbieA 14th Mar 17, 9:36 AM
    • 27 Posts
    • 9 Thanks
    AbbieA
    • #5
    • 14th Mar 17, 9:36 AM
    • #5
    • 14th Mar 17, 9:36 AM
    Thanks, I'll check it out!
    • PrettyFlower90
    • By PrettyFlower90 14th Mar 17, 1:23 PM
    • 182 Posts
    • 75 Thanks
    PrettyFlower90
    • #6
    • 14th Mar 17, 1:23 PM
    • #6
    • 14th Mar 17, 1:23 PM
    Far as I'm aware there are no banks at the minute that will offer a lifetime isa from next month, only a couple of investment companies i think. So not sure you'll have an option to transfer into a LISA from april 17..
    • AbbieA
    • By AbbieA 17th Mar 17, 9:15 PM
    • 27 Posts
    • 9 Thanks
    AbbieA
    • #7
    • 17th Mar 17, 9:15 PM
    • #7
    • 17th Mar 17, 9:15 PM
    Awesome video, thanks for sharing! And thanks for the explanation Martin Lewis. He advises opening the account as early as possible with a minimal amount so that its there to use if needed, as the account has to be opened for a year before you can accrue the bonus. A few things are not explained in his video though, following his advice:

    I have £3600 in a HTB ISA now.
    I invest £100 in a LISA in April whilst continuing to pay into my HTB ISA as usual.
    By March 2018 I have £5600 in my HTB ISA (and £1400 bonus).

    Can I transfer it all into my HTB ISA?
    Will I keep the £1400 bonus?
    Will I be able to invest a further £4k in April 2018 as a lump sum for the year and accrue the £1k bonus immediately?

    Any help appreciated...

    Thanks!
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