Help to buy ISA confusion

colsten

They are not available until December 1.

c0nfused_2

MARTYM8` wrote: »

Seems Nationwide does allow you to combine a help to buy ISA with other ISAs.

Answer to your first question yes - although you could transfer your ISA to Nationwide to get round the problem! Their save to buy ISA allows transfers in I believe but only from another NW ISA or account - so you would need to transfer in first to another NW ISA product and then switch in branch to the save to buy product. You can then open a help to buy ISA on top of these other ISAs with NW. However it can only be opened in branch.

Not aware that any other banks/Bsocs allow this multi ISA investment - and certainly none of the other big providers offering help to buy ISAs do.

I would therefore combine the NW HTB Isa with their save to buy ISA - the latter allows you to save up to £20k (within the ISA investment limits) but you must pay in £50 a month to earn the 2% interest offered. If the balance goes above 2% you only earn 0.25% on the excess but if you also utilise their 5% deposit save to buy mortgages you can get even more cashback (up to £1k currently if you have more than £10k in the save to buy product). If you do take out a mortgage with NW they also pay £500 to first time buyers on top - so you could get a further £1500 to top up your government help to buy isa scheme if an NW mortgage looks right for you.

So given the ability to combine with other cash ISAs Nationwide would seem to be the best bet if you want an HTB isa (particulary if you combine it with their save to buy ISA paying a very healthy 2% on what is effectively instant access).

Hope this is clear - the government don't make this easy for a product meant to be targeted at less savvy/younger investors.

Thank you so much, that is very helpful! I didn't know transferring to another Nationwise ISA then into the STB would be an option.

I had thought the entire interest rate drops to 0.25% if you go over 20k (the site says "* On balances over £20,000 0.25% AER tax-free variable will be paid on the whole balance"), but either way I can make sure this doesn't happen.

Sounds like I need to get myself an appointment at Nationwide.

@eskbanker I appreciate that, as you say it's not a lottery win but I'd be very glad of it, and if things end up taking a year rather than 6 months I don't want to be regretting not doing it

MARTYM8`

c0nfused wrote: »

Thank you so much, that is very helpful! I didn't know transferring to another Nationwise ISA then into the STB would be an option.

I had thought the entire interest rate drops to 0.25% if you go over 20k (the site says "* On balances over £20,000 0.25% AER tax-free variable will be paid on the whole balance"), but either way I can make sure this doesn't happen.

Yes – sorry the rate is 0.25% if the balance exceeds the £20k limit. Also the account can only be kept open for 3 years – if you haven’t taken out an NW mortgage by that date they will move you to their instant access ISA.

They also have a non ISA save to buy account which pays 2% and gives the same cash back benefits. You can save up to £5 million in that account – so its no doubt also useful for Russian oligarchs buying their first London mansion!

Might also be worth opening an NW current account too!

http://www.nationwide.co.uk/products/savings/save-to-buy/rates-and-information#xtab:tab2

alibean121

colsten wrote: »

They are not available until December 1.

I am quite surprised that there's been NOTHING on the web for months though. I wish they would publish some terms or rates or something on their websites. It would be good to be able to have time to look around at what's actually being offered. Have we had detailed rules yet? Because that would also be useful....

Archi_Bald

Don't panic. The ISAs will become available in the next couple of weeks, and you can then make an educated decision. You then have an entire month to make your move, without losing any of the allowance as that operates on a calendar month basis. In terms of how much bonus you can earn, it makes no difference whether you deposit your cash on the 1st or the 31st. But obviously waiting until the 31st would be cutting it a bit fine, and aiming to complete your first deposit before Xmas might be more sensible. That still leaves you with 3 good weeks to sift through all the offer details. As there will only be about half a dozen providers, it should not be a big job to compare the offers.

Hopefully your intended deposit for the first month sits in an account that earns more interest than you can earn in the ISA, so you'll not lose out on any interest either. In fact, if your money sits in a 5% AER account, you'd slightly better off to wait towards the end of December.

NB. there is quite a lot of information about this ISA about, incl 68 pages of scheme rules: http://www.helptobuy.gov.uk/docs/default-source/default-document-library/151102---scheme-rules.pdf?sfvrsn=2.

If that detail overwhelms you, try this government site: https://www.ownyourhome.gov.uk/scheme/help-to-buy-isa/

colsten

alibean121 wrote: »

I am quite surprised that there's been NOTHING on the web for months though.

Nothing? Where did you look?

MARTYM8`

colsten wrote: »

Nothing? Where did you look?

To be fair there has been little information from the big providers – presumably they will publish details shortly.

The fact that they need 68 pages to explain the product is incredible frankly. And the process via solicitors they are using for people to claim the bonus seems ridiculous – why can’t the lender claim it from the Government (particularly if your help to buy ISA is with your mortgage lender – as I expect will apply for many FTBs) or even the FTB.

Why do they need to involve your solicitor to claim the bonus – and deal with non completion – presumably they will just charge FTBs more for this service. Its just a recipe for delays and confusion! I expect the legal profession will make more money out of this scheme than the poor FTB – a £3k bonus won’t help much on a £450k flat in London!

colsten

What did you expect ISA providers to announce, other than that they will offer the HTB ISA, which they did around June time. They are probably still working on the T&C detail as we speak, and interest rates are something that they won't fix until the last minute. As Archi already mentioned, there's no need for any great rush before end of December, anyway. I also wonder what effort those who complain about lack of information made to find information.

If £3K isn't worth it, people don't have to take the money. But given that most of them will probably work for a month or more to make £3K net, I suspect there will be quite a few grateful takers.

As to the admin - - I believe this was worked out in consultation with ISA and mortgage providers as well as conveyancing professionals but if you have a better solution, why not present it to the Treasury for consideration?

Solicitors won't get rich from processing the claims as the max they are allowed to charge for this is £50.

MARKMAKAVELI

Thread hijack, hopefully quick question:

I have around £4-5k sat in a current account. My plan was to put it into this help to buy isa but with the limit of £200 pm it means that with the initial £1,200 it would take 54 months/4.5yrs to reach the maximum amount. I hope to buy potentially in the next 1-2 years.

What am I best doing?

I rung Natwest for help and they didn't have a clue. Thanks

eskbanker

MARKMAKAVELI wrote: »

Thread hijack, hopefully quick question:

I have around £4-5k sat in a current account. My plan was to put it into this help to buy isa but with the limit of £200 pm it means that with the initial £1,200 it would take 54 months/4.5yrs to reach the maximum amount. I hope to buy potentially in the next 1-2 years.

What am I best doing?

I rung Natwest for help and they didn't have a clue. Thanks

Whatever you're able to put into an HTB ISA will give you a tax-free return of 25% of the closing balance in addition to the interest earned, so what else would you plan to do with the money that would outperform that?!