Help to Buy ISA guide

eskbanker

serg85 wrote: »

So sounds like I essentially lost the allowance for 2016/17 having made that one small payment into regular ISA back in October?

No, it was by paying into an already open HTB ISA that you were effectively limiting yourself to a maximum of £2,400 contributions in 2016-17, unless you were to go down the split ISA (or S&S) route.

serg85 wrote: »

What are the options now?

If you've already withdrawn more from your standard cash ISA this tax year than you've paid in since April, then you can argue that you've already corrected your error via self-repair, so if you don't pay anything else into the standard cash ISA for as long as you're using an HTB ISA, then you should be OK.

Chances are your non-HTB money would be better saved elsewhere anyway, such as regular saver or current accounts, see http://www.moneysavingexpert.com/savings/which-saving-account for further details.

cmazza

Hi, just want to clarify a point - you can't contribute into another ISA in the same tax year as the HTBI? So if I were to open a HTBI this tax year, then the new lifetime ISA come April, I wouldn't be able to contribute into the lifetime ISA in 2017/18? So this would be pointless??

Ed-1

cmazza wrote: »

Hi, just want to clarify a point - you can't contribute into another ISA in the same tax year as the HTBI? So if I were to open a HTBI this tax year, then the new lifetime ISA come April, I wouldn't be able to contribute into the lifetime ISA in 2017/18? So this would be pointless??

You can't contribute into 2 ISAs of the same type in a tax year. A Help to Buy ISA is a cash ISA so you can't contribute to that and another cash ISA in the same year. However, Lifetime ISA is being implemented a completely separate ISA type so you can contribute to 4 ISAs within the overall £20,000 limit from April 6th:

Cash ISA (including Help top Buy ISAs - max £200 per month with £1.2k in first month),
Stocks and Shares ISA,
Innovative Finance ISA,
Lifetime ISA (max £4,000).

cmazza

Hi Ed-1 so I could contribute into the LISA and the HTBI and still get the bonus?

bowlhead99

cmazza wrote: »

Hi Ed-1 so I could contribute into the LISA and the HTBI and still get the bonus?

Once both are available, anything you choose to put into your HTB reduces your £4000 LISA allowance for that year because the max contributions they'll give you a bonus on for any one tax year is £4000.

You can transfer all the amount in your HTB into your new LISA, at any point in the 2017/18 tax year. You could transfer your HTB balance right at the beginning of the year and then put £4000 into the LISA wherever you want. Or for example, you could keep putting money into your HTB during 2017/18 at £200pm and then transfer it all into the LISA at the very end, and put a separate £1600 of new money into the LISA that year too, as long as the total of new money from your bank account into those ISA products combined doesn't go over £4000.

Once the LISA is available, the question of whether it makes sense to keep contributing to the HTB, or just crack on with using the LISA - depends on the relative interest rates and how much cash you have available when.

cmazza

Thanks Bowlhead. That makes sense now, I was hoping that there may be some sort of loophole where I could get 50% interest on my savings! A bit of wishful thinking I suppose. In that case I will wait for the LISA to become available.

LeanneM

I opened a H2B ISA with Halifax in early 2016 and the interest rate was 4%. I received a letter saying this would be reducing to 3.5% interest and my account currently states interest is 3.5%.... but I note the MSE article says Halifax is 2%. Is that just because its changed for new customers? Im just wanting to confirm my rate is currently the best out of other providers. Thanks

LeanneM

cmazza wrote: »

Thanks Bowlhead. That makes sense now, I was hoping that there may be some sort of loophole where I could get 50% interest on my savings! A bit of wishful thinking I suppose. In that case I will wait for the LISA to become available.

Just be careful with the LISA, if you are hoping to buy before April 2018 then you wouldn't be able to, the LISA bonus won't be applied until April 2018 at the earliest so thats the earliest you could cash it in and buy. I'm hoping to buy before then so I'm sticking with my H2B.

Ed-1

LeanneM wrote: »

I opened a H2B ISA with Halifax in early 2016 and the interest rate was 4%. I received a letter saying this would be reducing to 3.5% interest and my account currently states interest is 3.5%.... but I note the MSE article says Halifax is 2%. Is that just because its changed for new customers? Im just wanting to confirm my rate is currently the best out of other providers. Thanks

Yes, it's higher for those that got in in the early days.

Jenwales_2

I'm confused about the bonus. In the helptobuy article on the help to buy website it says: "Once they receive the government bonus, it will be added to the money you are putting towards your first home. The bonus must be included with the funds consolidated at the completion of the property transaction. The bonus cannot be used for the deposit due at the exchange of contracts, to pay for solicitor’s, estate agent’s fees or any other indirect costs associated with buying a home. - See more at: https://www.helptobuy.gov.uk/help-to-buy-isa/how-does-it-work/#sthash.eVvCCziR.dpuf"
So they seem to say you can't use it for the deposit so what can you use it for? We thought that this would help us to increase our deposit for the mortgage but then read an article where one couple couldn't use it and I'm confused whether or not I can. If not I don't see if it's going to be any use to me and I'm concerned I won't have enough deposit