Help to Buy ISA guide

eskbanker

mojohito said:

eskbanker said:

mojohito said:

I’m nearly at the £12k max savings for H2B ISA.

There is no £12K maximum as such, it's just that savings above that don't increase the government bonus.

mojohito said:

Once I reach it, in the next tax year, can I stop making payments....

You can stop whenever you like, there's no monthly minimum.

mojohito said:

....and open a cash ISA?

You can open a cash ISA whenever you want but as HTB ISA is a cash ISA, you can only pay new money into one or the other in any given tax year, unless both are with one of the few providers supporting the 'split ISA' concept

mojohito said:

I also have a LISA, don’t know if that affects my plans?

Not in terms of which ISAs you can pay into, but worth deciding which product you wish to use to support your first property purchase, given that you can't benefit from the government bonus from both HTB and LISA when buying.

So surely it makes more sense to change to a cash ISA once you reach the £12k government bonus cap?
Seeing as you can't pay more than £200/month into a H2B ISA? And then just keep the £12k in the H2B ISA until I purchase my first property?

Maxing out an HTB ISA and a LISA takes care of £6,400 per tax year, so yes, if you can save more than that then it'll be worth looking at your options from a broader perspective - obviously you know more about your finances than those of us who can only go on what you choose to share!  A non-HTB cash ISA may be part of the answer but it's also possible that one or more taxable accounts may be better....

BrendaSB

I understand as I have a split Cash ISA and HTB ISA with Nationwide I can pay into both this tax year . If I pay £1000 into the cash ISA can I then transfer it to another provider ?

Alexland

If you pay into both parts this tax year and then transfer out the new contributions in one part it would break the rule that you cannot partially transfer current year Cash ISA contributions.

charlie12525

This tax year I have contributed to both an existing Nationwide "loyalty" cash ISA and an existing Nationwide HTB ISA.
Last week I did a full transfer out of the "loyalty" ISA and left the HTB ISA where it is.
Does this break the rules?
During a previous unrelated conversation with Nationwide they said that you could contribute to 2 of their cash ISAs and they were classed as seperate ISAs by HMRC.

eskbanker

charlie12525 said:

This tax year I have contributed to both an existing Nationwide "loyalty" cash ISA and an existing Nationwide HTB ISA.
Last week I did a full transfer out of the "loyalty" ISA and left the HTB ISA where it is.
Does this break the rules?
During a previous unrelated conversation with Nationwide they said that you could contribute to 2 of their cash ISAs and they were classed as seperate ISAs by HMRC.

Yes, this breaks the rules if your current year cash ISA money is now spread across two different institutions.  Nationwide is indeed one of the providers allowing 'split ISAs' which enable you to split your contributions across multiple cash ISAs with the same provider, but across multiple providers is an entirely different story I'm afraid....

charlie12525

OK.
So to correct this could I just do a partial transfer of the £200 I have put into my Nationwide HTB ISA this tax year to the same provider I transferred the Nationwide loyalty ISA to leaving the remainder of my HTB ISA with Nationwide?

eskbanker

charlie12525 said:

OK.
So to correct this could I just do a partial transfer of the £200 I have put into my Nationwide HTB ISA this tax year to the same provider I transferred the Nationwide loyalty ISA to leaving the remainder of my HTB ISA with Nationwide?

Given the relative importance of retaining a valid HTB ISA, I don't think I'd risk an attempted self-repair and would suggest that you contact HMRC and seek their guidance, which may depend on the order in which you subscribed.

You can read up more about these situations at https://www.gov.uk/guidance/close-void-or-repair-an-isa-if-youre-an-isa-manager#repair-void but probably best to pay most attention to:

When you find out (usually from the investor) that the investor has subscribed to a disallowed combination of ISAs, or has exceeded the overall ISA subscription limit, you should advise the investor that HMRC will contact them in due course. You should not give any advice to customers, as you may not have all of the relevant facts or be certain of the action that HMRC will take.

If the investor wishes to contact HMRC to discuss the error, they can phone the ISA Helpline.

masonic

charlie12525 said:

This tax year I have contributed to both an existing Nationwide "loyalty" cash ISA and an existing Nationwide HTB ISA.
Last week I did a full transfer out of the "loyalty" ISA and left the HTB ISA where it is.
Does this break the rules?
During a previous unrelated conversation with Nationwide they said that you could contribute to 2 of their cash ISAs and they were classed as seperate ISAs by HMRC.

Are you sure that Nationwide did a partial transfer of your current year subscriptions (i.e. transferred fully the loyalty ISA containing current year money, while leaving behind current year money in the HTB ISA)? If so, it is their error as the onus is on them not to partially transfer current year money.

The logical course of action in this case is for Nationwide to contact the new provider and explain the error, and for the transfer to be rejected and your Loyalty ISA reinstated. You could then follow up with a valid transfer request for previous year money only.

kierandaly_6

Hi,
I'm a Uni undergrad with a HTB ISA. The rate has just been cut from 2.5% to 1% due to coronavirus. I just wanted to know what the best option for me to do at this point is, as I'm not sure if it's worth keeping it at the lower rate? 
Thank you!

eskbanker

kierandaly_6 said:

I'm a Uni undergrad with a HTB ISA. The rate has just been cut from 2.5% to 1% due to coronavirus. I just wanted to know what the best option for me to do at this point is, as I'm not sure if it's worth keeping it at the lower rate?

Which options are you considering?  The HTB 25% bonus becomes increasingly significant as interest rates decline, so don't ditch it unless you have something significantly better in mind.

There are still some products offering higher rates but it may not be straightforward to transfer, at least one entails a paper-based process if I recall correctly: https://www.moneysavingexpert.com/savings/help-to-buy-ISA/#bestbuys

Lifetime ISA may be a better bet but dependent on how much you have in the HTB and when you'd be looking to buy....