Help to Buy ISA guide

masonic

techiejay wrote: »

Oh !!!!!!. I just paid £200 into mine. Was going to do the same into hers when I discovered it was closed. Wish I'd have done that first now!

Which HTB ISA? If it is a flexible ISA, you could still make a flexible withdrawal of the £200, close the ISA and be free to open a new one. If not, you could transfer it to a S&S ISA, then open a new HTB ISA.

techiejay

masonic wrote: »

Which HTB ISA? If it is a flexible ISA, you could still make a flexible withdrawal of the £200, close the ISA and be free to open a new one. If not, you could transfer it to a S&S ISA, then open a new HTB ISA.

I don't know much about the different types sorry, it's just a normal Virgin Money help to buy ISA if that means anything to you? :-)

masonic

techiejay wrote: »

I don't know much about the different types sorry, it's just a normal Virgin Money help to buy ISA if that means anything to you? :-)

Virgin Money's HTB ISA is not flexible, so you have the option to do an ISA transfer to a S&S ISA or an IF ISA (then withdraw the money without making any investments and close the account). Once transferred, you're treated as never having paid into the HTB ISA and could open a new one with the £1200 initial deposit.

It's more hassle, but the additional £250 bonus money might make it worth it.

techiejay

masonic wrote: »

Virgin Money's HTB ISA is not flexible, so you have the option to do an ISA transfer to a S&S ISA or an IF ISA (then withdraw the money without making any investments and close the account). Once transferred, you're treated as never having paid into the HTB ISA and could open a new one with the £1200 initial deposit.

It's more hassle, but the additional £250 bonus money might make it worth it.

Perfect, thanks so much! Yes an additional £250 would definitely be most welcome, I'll speak to them tomorrow and find out how to go about it :-)

Theogaran

Hi there, i am hoping someone can help me with out with a quick query. For the main help to buy ISA's that have the best interest rates (shown on another thread), is interest still receivable once you reach the £12k limit?
I know HSBC offers a lower interest rate (2.25%) up to £12k but then continues to offer interest at a reduced rate (0.6%) interest on amounts above £12k

eskbanker

Theogaran wrote: »

Hi there, i am hoping someone can help me with out with a quick query. For the main help to buy ISA's that have the best interest rates (shown on another thread), is interest still receivable once you reach the £12k limit?
I know HSBC offers a lower interest rate (2.25%) up to £12k but then continues to offer interest at a reduced rate (0.6%) interest on amounts above £12k

There's nothing in the scheme rules about interest above £12K so any terms about this would be applied by individual institutions and therefore it's impossible to generalise.

In other words, you'd need to check the terms of whichever account you're specifically interested in - a quick look at the Barclays summary box at https://www.barclays.co.uk/savings/isas/help-to-buy-isa/ shows that they pay 2.58% AER on balances over £1, without any tiering above £12K mentioned (as it would need to be) so they obviously take a different stance from HSBC....

JJwrites

Hi there, I wondered if anyone could advise... I'm 33, self employed and have low savings at the mo but I want to know whether I should open a Help to Buy ISA, a LISA, or both?

I've read the advice on here but still a bit unsure, reasons being:
- I want to buy a house one day, but I don't know how likely it is due to my income, plus I'm single, and no help available from parents etc (my whole family rents), living in London (£££)
- I don't have a pension due to recently going freelance so wonder if the LISA is a safer option?
- I can't really save at the moment (recently made redundant/went freelance) so won't be able to save much over the next few months

Any tips much appreciated!
Thank you
JJ

masonic

JJwrites wrote: »

Hi there, I wondered if anyone could advise... I'm 33, self employed and have low savings at the mo but I want to know whether I should open a Help to Buy ISA, a LISA, or both?

I've read the advice on here but still a bit unsure, reasons being:
- I want to buy a house one day, but I don't know how likely it is due to my income, plus I'm single, and no help available from parents etc (my whole family rents), living in London (£££)
- I don't have a pension due to recently going freelance so wonder if the LISA is a safer option?
- I can't really save at the moment (recently made redundant/went freelance) so won't be able to save much over the next few months

Paying into a HTB ISA is a no brainer because interest rates are market leading and it can be used as a high interest savings account if you don't end up buying.

Whether or not you open a LISA depends on whether you'd be content with the money being locked up until you are 60 (or accessed subject to a penalty equivalent to about 6% of your capital). If you can't save more than £200 per month, then it might make sense to prioritise a HTB ISA.

You mention you don't have a pension, and ask if a LISA is a safer option. The answer to that depends on what you mean by 'safer'. Both pensions and LISAs can hold cash or cash-like investments, or they can hold very risky investments. Cash is quite risky when held in the long term due to inflation risk. In all likelihood, you'll be able to access both at around the same time (as the state pension age continues to rise so may the age you can access other pensions). Since you wouldn't benefit from higher rate tax relief, employer contributions or salary sacrifice, there isn't much between the two products when it comes to tax relief. Although there might be a way in which you could make your pension contributions more tax efficient by setting up as a company.

Rich2808

JJwrites wrote: »

Hi there, I wondered if anyone could advise... I'm 33, self employed and have low savings at the mo but I want to know whether I should open a Help to Buy ISA, a LISA, or both?

I've read the advice on here but still a bit unsure, reasons being:
- I want to buy a house one day, but I don't know how likely it is due to my income, plus I'm single, and no help available from parents etc (my whole family rents), living in London (£££)
- I don't have a pension due to recently going freelance so wonder if the LISA is a safer option?
- I can't really save at the moment (recently made redundant/went freelance) so won't be able to save much over the next few months

Any tips much appreciated!
Thank you
JJ

Agree with the previous points raised. The help to buy isa is more flexible as you can close it at any time without penalty and they pay good rates (2.5% plus) - but you must open one by the end of November this year but can carry on paying in until 2029 and must claim your bonus by 2030. So you have 11 years in which to buy.

Assuming you buy in the Greater London area the property limit to qualify for a bonus is the same for both - £450,000. That applies to shared ownership too (which may be an option for you in the capital) - bearing in mind that its the total value of the property not the share you buy that counts. Of course finding a decent property in London for less than £450k isn't easy - particularly in zones 1-3.

You could of course open both products - the sooner the better really as it gives you more time to build up your savings.

And good luck! But don't forget the 30 November deadline for opening a HTB isa.

JohnMl88

Can I open a Help to buy ISA and a LISA the same tax year?