Help to Buy ISA guide

Layers

I'm torn between Help to buy and LISA. I defiantly want to buy a house in the future, but I can only put in a max of £2,000 in a year. Meaning I wouldn't get all the benefits of a LISA, so should I go for Help to Buy???

eskbanker

Clarky13 wrote: »

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?

Withdrawing money from a LISA (other than for a first property purchase or after 60) entails paying a 25% penalty, which perhaps disincentivises the holder from raiding it if that's what you're fearing, whereas HTB is genuinely easy access.

eskbanker

older_wiser wrote: »

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 ?

The HTB scheme rules are all about contribution limits per calendar month, and the £1,200 needs to be paid in within the same calendar month in which the first deposit is made, therefore your friend only has until this Saturday (30th November) to take advantage of the higher initial amount, and can only pay in up to £200 in December and every month thereafter.

eskbanker

Layers wrote: »

I'm torn between Help to buy and LISA. I defiantly want to buy a house in the future, but I can only put in a max of £2,000 in a year. Meaning I wouldn't get all the benefits of a LISA, so should I go for Help to Buy???

There are many factors that differentiate between HTB and LISA, most of which are summarised at https://www.moneysavingexpert.com/savings/lifetime-isas/#property-6

Possibly the most important plus point with LISA for a first-time property is the higher value cap (£450K v £250K with HTB outside London), but a potential negative with LISA is that the money isn't available without penalty for a year (if buying a property) or until 60 (if not).

John_G_Doo

I saw the money saving tv programme on Monday and I am keen on getting an ISA but I am currently unemployed and claiming benefit and I am not sure which ISA I should go for. I am interested in the life time ISA but when I visited the banks and building societies on my high street { Sidcup} They all told me they did not do lifetime ISA's with the exception of HSBC. But when I showed the staff the paperwork I downloaded from MSE they said they did not do that. Since then I checked online and Halifax offer it so why did the staff deny it?. Right now I very much doubt I will be able to buy a home, I worked out approximately that I would have to earn £30,000 a year and I would be clear of the mortgage when I turn 96.

bowlhead99

John_G_Doo wrote: »

I saw the money saving tv programme on Monday and I am keen on getting an ISA but I am currently unemployed and claiming benefit and I am not sure which ISA I should go for. I am interested in the life time ISA

If you don't have much money or stable employment it might not be a great idea to put money into a lifetime ISA, because although they would give you a bonus on money you put in, you would lose the bonus and have to pay a penalty if you withdraw the money unless it's for a qualifying reason (eg first time house purchase, or once you're over 60). There is no particular rush to get one of these accounts, especially if it's likely you might need to get your hands on the money again to support your unemployment.

They all told me they did not do lifetime ISA's with the exception of HSBC. But when I showed the staff the paperwork I downloaded from MSE they said they did not do that.

HSBC don't do lifetime ISAs. They do do other types of ISAs including Help to Buy ISAs https://www.hsbc.co.uk/savings/what-is-an-isa-account/

Since then I checked online and Halifax offer it so why did the staff deny it?.

Halifax don't offer lifetime ISAs either. But just like HSBC, they do offer Help to Buy ISAs. The Help to Buy ISA is the product that will no longer be available to open after this week.

Right now I very much doubt I will be able to buy a home, I worked out approximately that I would have to earn £30,000 a year and I would be clear of the mortgage when I turn 96.

It would not really hurt to get a help to buy ISA this week before they are withdrawn from sale. You can open it with a small amount and don't need to pay into it every month, and you can take your money back out without any penalties if you need to. However the Lifetime ISA is more of a commitment because once you pay in, you can't get at your money without paying a penalty

older_wiser

eskbanker wrote: »

The HTB scheme rules are all about contribution limits per calendar month, and the £1,200 needs to be paid in within the same calendar month in which the first deposit is made, therefore your friend only has until this Saturday (30th November) to take advantage of the higher initial amount, and can only pay in up to £200 in December and every month thereafter.

thanks for the reply i'll tell him to do it before saturday
its appeared in his online accounts according to his text last night.

Rich2808

John_G_Doo wrote: »

I saw the money saving tv programme on Monday and I am keen on getting an ISA but I am currently unemployed and claiming benefit and I am not sure which ISA I should go for. I am interested in the life time ISA but when I visited the banks and building societies on my high street { Sidcup} They all told me they did not do lifetime ISA's with the exception of HSBC. But when I showed the staff the paperwork I downloaded from MSE they said they did not do that. Since then I checked online and Halifax offer it so why did the staff deny it?. Right now I very much doubt I will be able to buy a home, I worked out approximately that I would have to earn £30,000 a year and I would be clear of the mortgage when I turn 96.

You can open a help to buy isa for £1 – at a branch, online or by post.
They generally pay much better rates than other cash isas.
So I would still open one even if just for £1 – you have 11 years to build up your savings and claim a bonus of 25% of the balance (if you buy) and who knows how your circumstances could improve in terms of house buying. If you never buy you can simply withdraw the funds in 2030 or before then.
But if you don’t open one in the next 2 days its too late for good!

Karen_Howland

Please help! My daughter is travelling in australia and working along the way therefore paying tax, is she still eligible for the help to buy isa please?

Rich2808

Karen_Howland wrote: »

Please help! My daughter is travelling in australia and working along the way therefore paying tax, is she still eligible for the help to buy isa please?

Assuming she is planning to come back and keeps the UK as her main residence it should be fine.

I assume she is taking advantage of the 18-30 working holiday visa - which doesn't of course give you permanent residency status so by definition requires you to return.