Help to Buy ISA guide

MbjmnSmart

Thanks,
What about:
Transfer all of Fixed to a Flexible.
Open a LISA with £4000 rght now.
Open a HTB with £1200
Set up £200/m payment from Fexible to HTB
Then come April next year Transfer another £4000 from Flexible to LISA.

Is that allowed?

Would this maximise the interest on the available savings (£13k in the fixed, not £5k as originally stated), and use the LISA for the first house purchase, when the time comes?

eskbanker

What you propose is workable but nobody can say if it'll maximise interest without more details about the rates of all accounts involved, and what the penalties are for withdrawing from the fixed term account. It's also usually best to think about this in terms of maximising overall return rather than specifically the interest component, as the 25% bonuses available from LISA or HTB will typically be far more significant than the interest.

familyjuggler

I am encouraging my kids to set up a h2b ISA. They have never had an ISA. I have read about splitting between ISAs retroactively if you already have one. Does that apply prospectively too? If they choose one of the ISAs where you can split, can they later set up another ISA?

Say they get a h2b NatWest ISA each, and can withdraw cash if they need to, are there other ISAs where access to cash is limited but the interest rate is higher ---- would they be able to open one of the those as well and pay into both in the same year?

I guess what I am really asking, looking at the next 10 years, is there an opportunity cost of opening an h2b ISA?

Thank you! So many clever people here :-)

eskbanker

If opening a HTB ISA with one of the providers offering split ISAs, then subsequent cash ISAs can be opened and funded with the same provider.

Given the HTB ISA bonus of 25%, this will typically outweigh any interest, so withdrawal from a HTB ISA should be something of a last resort, i.e. they should open an easy-access account (not necessarily an ISA, they're not the no-brainer they once were) for at least some of any surplus....

iMarkeh

Having listened to what Martin has said about the joys of the H2B isa, I have come to the conclusion, I may want to buy a house within 10 years and in which case, the gov bonus would be useful, however, if circumstances change, could the account just be used as a generous savings account with no intent of purchasing a house?

At 2.5% interest with Barclays, I would be getting free money at a much better rate than my normal savings account.

Thanks in advance.

eskbanker

iMarkeh wrote: »

Having listened to what Martin has said about the joys of the H2B isa, I have come to the conclusion, I may want to buy a house within 10 years and in which case, the gov bonus would be useful, however, if circumstances change, could the account just be used as a generous savings account with no intent of purchasing a house?

At 2.5% interest with Barclays, I would be getting free money at a much better rate than my normal savings account.

Thanks in advance.

Yes, there's no obligation to use the money towards a property (although you'd miss out on the bonus by not doing so) - it's an easy-access account with no withdrawal penalties (unlike the Lifetime ISA) and so if you are eligible to open one then it is indeed a relatively generous savings account.

Krimsat

I have a question. Is it possible to have help to buy mortgage and help to buy ISA together or it should one of each?

eskbanker

Krimsat wrote: »

I have a question. Is it possible to have help to buy mortgage and help to buy ISA together or it should one of each?

Not sure if this answers your question, but if it doesn't you might wish to rephrase it more clearly:

https://www.helptobuy.gov.uk/help-to-buy-isa/faq/#e69a24ea-e1f7-648f-8ce9-ff0000ad17aa

Can I use my Help to Buy: ISA with any other Government housing schemes?

Yes. You can use your Help to Buy: ISA with other Government schemes, like the Help to Buy: Equity Loan scheme (subject to meeting the eligibility requirements of the other scheme/s you wish to participate in). Details of Government housing schemes can be found at: ownyourownhome.gov.uk.

Clarky13

eskbanker wrote: »

You're not allowed to open any adult accounts on behalf of someone else, as individuals are solely responsible for their finances (and declarations to HMRC) so can't do this if there are accounts they don't know about.

If they've been left money in a will, it's legally theirs and you don't have the right to intervene anyway....

Thanks. Good point about the Will issue, but this money wasn't actually mentioned in a legal Will document, just a verbal request. In the interest of getting the money in an ISA quickly and having it earmarked for a property purchase only, would you recommend a LISA instead?

older_wiser

a friend has just opened a new Help to buy isa with the required £1 does he have until december 27 to deposit another £1199.00 to get the full max allowed for the first month or does this need to be deposited by the 30 november ?