Help to buy ISA confusion

MARKMAKAVELI

sorry eskbanker, my problem is that the limit you can put in is £200 pm, meaning it would take over 4yrs to get to the max 12k.

If I've understood that correctly and I plan in buying in a year or 2 then what should I be doing in conjunction with this as I don't have 4 years to save.

jimjames

MARKMAKAVELI wrote: »

sorry eskbanker, my problem is that the limit you can put in is £200 pm, meaning it would take over 4yrs to get to the max 12k.

If I've understood that correctly and I plan in buying in a year or 2 then what should I be doing in conjunction with this as I don't have 4 years to save.

Current accounts? Regular savers? Regardless of how long you keep thr HTB ISA for you get a very good return so it's still better than any other savings.

eskbanker

MARKMAKAVELI wrote: »

sorry eskbanker, my problem is that the limit you can put in is £200 pm, meaning it would take over 4yrs to get to the max 12k.

If I've understood that correctly and I plan in buying in a year or 2 then what should I be doing in conjunction with this as I don't have 4 years to save.

Sorry, perhaps I wasn't clear - my point was that there's no point worrying that you can't reach the maximum amount in an HTB ISA because of timescales, just put as much in as you can, since it'll be better than anything else even for a shorter period than the 4 years needed to fill it. As per jimjames's recommendation, for the rest you could do worse than filling up a couple of 5% current accounts (e.g. TSB and Nationwide) and/or drip-feeding some 6% regular savers - start at http://www.moneysavingexpert.com/savings/which-saving-account and read the linked articles from there....

MARKMAKAVELI

Ok thanks for the link, will read it now.

My problem still remains though, in order to "cash out" the maximum on this isa, I need to put in the intitial 1.2k then £200 per month until I hit 12k.

So in order to get the max benefit I'll have to be putting in/waiting for 4.5years.

Just want to make sure I've understood that correctly? Seems slightly floored if you want to buy in the next couple of years like I do.

eskbanker

Yes, you've understood it correctly - in order to achieve the maximum possible bonus from this scheme you need to be in it for over four years, and so if you're looking to buy before that then you'll receive a correspondingly lower bonus payment.

Not sure I share your apparent sense of being penalised in some way by this though, just think of it as a long-term savings scheme that you only want to participate in for half of its duration - you might even find that the value of the property you're able to buy in 2017/18 increases by more than the extra £1.5K bonus that would have accrued during the rest of that period up to 2020!

colsten

MARKMAKAVELI wrote: »

So in order to get the max benefit I'll have to be putting in/waiting for 4.5years.

You and all the other HTB ISA holders.

You can close your HTB ISA before the full term is up. You also can buy your first property without an HTB ISA if you don't want or need the extra cash.

KDH_2

Question re next tax year 16-17

Presumably I'm correct in thinking that if a HTB ISA is opened in Dec 2015 and contributions continue to be made into it from April 2016,this means that another Cash ISA cannot be opened and additional contributions made into it after April 2016?

ie the rules are that contributions cannot be made to two cash ISA's in the same tax year rather than two cash ISA's cannot be opened in the same tax year (and both contributed to). [With the exception of Post Office,Newcastle and Nationwide cash ISA's]

colsten

Correct.

But saving into a normal cash ISA is probably a non-sensical thing to do anyway, as you are likely to earn a lot more interest in Regular Savings and current accounts. This is particularly true when the new savings allowance kicks in from next April.

KDH_2

Normally I'd agree.... but I'm talking about a 16-17 year old who has a double ISA allowance. Likely to open a Cash ISA in addition to Junior ISA(stocks/shares)and a H2B ISA and then transfer the cash ISA into a stocks and shares ISA when 18 (market conditions allowing)

KDH_2

Is this right? Do Halifax also have the total yearly wrapper??
Taken from The Times today

""What if I already have an Isa?
You can only open one cash Isa in each tax year. If you have already opened an Isa this year (after April 5), you can transfer up to £1,200 (a lump sum of £1,000 and £200 for the first month’s payment) and the rest would have to be moved into either a stocks and shares Isa or a non-Isa account. You can then set up a direct debit for monthly payments. If you have used up your annual allowance, it may be better to wait until the new tax year because you would lose your tax-free earnings for the rest of the year on the rest of your savings. However, Halifax has a Isa wrapper, which means you can save into a standard Isa and a Help to Buy Isa as long as it does not exceed the yearly allowance of £15,240.""

link ( -subscription needed)
http://www.thetimes.co.uk/tto/money/mortgages/article4626019.ece

this would tend to contradict the above...........
http://www.thisismoney.co.uk/money/mortgageshome/article-3335341/Halifax-launches-4-rate-Help-Buy-Isa.html?