Help to Buy ISA - No Monthly Limit??

tain

I thought I was totally clear on the HTB ISA details. You can save up to £200 a month, but nothing more. Sounded simple, but then the Virgin Money website started confusing me.

"Beyond the monthly limits, there is no maximum amount you can save in your Help to Buy: ISA, but the maximum bonus you can earn is £3,000."

https://uk.virginmoney.com/virgin/savings/help-to-buy-isa/

Now what does that mean? I'm aware that the HTB ISAs will also offer interest aside from the government bonus, exactly like any other ISA will.


Does the sentence above mean that the account will still be the same as a standard ISA with the £15k yearly limit, and can still accrue ISA interest from the bank, but only £200/month will get the government funding?


ML suggested that banks might offer favourable interest rates on HTB ISAs as it's a market they're interested in having on their books. Does this mean I can take full advantage of that with all my savings (~£12k), rather than just the maximum £2400 (£3600 first year) that the scheme allows??


I fear this is just dodgy wording from Virgin, but I can't find anything to clarify it either.

colsten

tain wrote: »

I thought I was totally clear on the HTB ISA details. You can save up to £200 a month, but nothing more.

correct except for the first month, when you can deposit a total of £1,200.

tain wrote: »

Does the sentence above mean that the account will still be the same as a standard ISA with the £15k yearly limit, and can still accrue ISA interest from the bank, but only £200/month will get the government funding?

No. You can deposit £200 a month (£1,200 in the first month) and you can do this for several years. In fact, in order to earn the maximum bonus of £3,000, you do need to save for several years.

tain wrote: »

ML suggested that banks might offer favourable interest rates on HTB ISAs

the jury on that is out. I doubt the rates will be good. We shall know soon.

tain wrote: »

Does this mean I can take full advantage of that with all my savings (~£12k), rather than just the maximum £2400 (£3600 first year) that the scheme allows??

You can, but only with Nationwide who are administering cash ISAs in a special way. But unless their HTB ISA interest rate is stunning (>4%), you can get a lot better interest for your non HTB ISA money in current accounts and Regular Savings accounts. Remember that from April 6 2016, a basic rate tax payer can earn £1,000 savings interest tax free, outside ISAs.

tain wrote: »

I fear this is just dodgy wording from Virgin, but I can't find anything to clarify it either.

it isn't dodgy. It is 100% correct. You cannot exceed the monthly deposit limits, and your maximum bonus will be £3,000.

Official HTB ISA FAQ: http://www.helptobuy.gov.uk/help-to-buy-isa/faq

alibean121

I think what they've written is fine and pretty clear. When I first looked at the page, I couldn't see what line you were complaining about.

"Beyond the monthly limits, there is no maximum amount you can save in your Help to Buy" means you must keep to the monthly limits but, other than that, you can pay in as much as you want which is exactly the situation.

tain

Sorry guys, you've both been quite unhelpful. You've both ignored Virgin's wording and just rehashed what I already knew.

If nationwide are doing something funky with the HTB ISA, why wouldn't that wording suggest the same of Virgin? It very very clearly says 'there is no maximum amount you can save in a HTB ISA'

I'm pretty certain they're not being stupid and suggesting people save beyond the 5 years. And even if they are - that still makes no sense. Why allow beyond 5 year saving in excess of the bonus limits, but not in a single month? You either allow it or you don't.

tain

alibean121 wrote: »

I think what they've written is fine and pretty clear. When I first looked at the page, I couldn't see what line you were complaining about.

"Beyond the monthly limits, there is no maximum amount you can save in your Help to Buy" means you must keep to the monthly limits but, other than that, you can pay in as much as you want which is exactly the situation.

I disagree. When they talk of monthly limits they mean bonus limits. Talking about beyond 5 year savings makes no sense at all.

If that's not what you mean, then you've been even less clear than Virgin.

_CC_

It simply means you can carry on saving into the HTB ISA but the amount of bonus you get is capped at £3,000.

colsten

May be you should read what was said, by alibean121 and myself, and _CC_ now as well. I will try again. I have not ignored Virgin's wording - if you read what I wrote you will see that I said that it is 100% correct.

They are not saying 'there is no maximum amount you can save in a HTB ISA'. Your first quote was right: 'Beyond the monthly limits, there is no maximum amount you can save in your Help to Buy: ISA'. Subtle difference.

The same is true for Nationwide, or any other HTB ISA provider. It's just that Nationwide allow you to save into another cash ISA, alongside your HTB ISA, up to your total ISA allowance. As I said, this might not be a clever idea, but it is technically an option.

I agree that it is most likely a stupid idea to save into the HTB ISA for more than 5 years, or for more than 4 years and 7 months to be precise. However, there is no rule that stops you from doing so. As I am sure you have read in the FAQ I linked, you have until 1 December 2030 to claim your bonus, so in theory you could open the HTB ISA this December and pay £200 a month into if for the next 15 years (or even longer, if you want to be really stupid, and if ISAs still exist). Whilst you'd have in excess of £37K in your ISA by the bonus deadline, you'd still only get max £3,000 bonus. This is precisely what Virgin are saying.

tain

colsten wrote: »

May be you should read what was said, by alibean121 and myself, and _CC_ now as well. I will try again. I have not ignored Virgin's wording - if you read what I wrote you will see that I said that it is 100% correct.

They are not saying 'there is no maximum amount you can save in a HTB ISA'. Your first quote was right: 'Beyond the monthly limits, there is no maximum amount you can save in your Help to Buy: ISA'. Subtle difference.

The same is true for Nationwide, or any other HTB ISA provider. It's just that Nationwide allow you to save into another cash ISA, alongside your HTB ISA, up to your total ISA allowance. As I said, this might not be a clever idea, but it is technically an option.

I agree that it is most likely a stupid idea to save into the HTB ISA for more than 5 years, or for more than 4 years and 7 months to be precise. However, there is no rule that stops you from doing so. As I am sure you have read in the FAQ I linked, you have until 1 December 2030 to claim your bonus, so in theory you could open the HTB ISA this December and pay £200 a month into if for the next 15 years (or even longer, if you want to be really stupid, and if ISAs still exist). Whilst you'd have in excess of £37K in your ISA by the bonus deadline, you'd still only get max £3,000 bonus. This is precisely what Virgin are saying.

I still disagree. You don't use words like 'no maximum amount you can save' when what you really mean is 'you can save for years on end'. If they meant the latter, they would have said the latter. It doesn't make sense to use the wording they have, hence me thinking they mean something else.

tain

To be clear - the only 'monthly limit' we're certain of is the limit to the bonus you can receive.


I previously thought it also meant that you cannot have any extra new money in any ISA product for the whole year, but the wording they've used here doesn't say that at all.


Looking at it from two other angles - if they ARE saying that I can now only have £2400 a year in an ISA, that's depriving me of £12,600 of tax-free savings that I'm entitled to.


But at the same time, they're compounding all that £15,000 interest allowance into a much smaller amount, which might be their whole point.

jimjames

tain wrote: »

I still disagree. You don't use words like 'no maximum amount you can save' when what you really mean is 'you can save for years on end'. If they meant the latter, they would have said the latter. It doesn't make sense to use the wording they have, hence me thinking they mean something else.

I'm not sure what you're trying to get at but the wording seems very clear to me. There is a monthly limit but no limit on the number of months you can save for.

tain wrote: »

Looking at it from two other angles - if they ARE saying that I can now only have £2400 a year in an ISA, that's depriving me of £12,600 of tax-free savings that I'm entitled to.

They might be doing you a favour with cash ISA rates so low. If it's really important to you, you can use an ISA from Nationwide as already mentioned. You can also use the remaining allowance for a S&S ISA.

eskbanker

tain wrote: »

When they talk of monthly limits they mean bonus limits.

tain wrote: »

To be clear - the only 'monthly limit' we're certain of is the limit to the bonus you can receive.

Where are you getting this idea from that the monthly limit of £200 relates to the bonus? It doesn't, it's an absolute maximum payable into an HTB ISA in any given month (other than the first).

And yes, this means that you can't put anything like as much into an HTB ISA as any other ISA product, where the annual limit is £15,240 rather than just a few thousand.