Help to Buy ISA guide

kaisquared

Hi there

I have read from the start of Section 11 about the Lifetime ISA.

"The bonus is also paid differently - with a Lifetime ISA you can get a maximum of £1,000 - 25% of the max £4,000 saving - paid at the end of every tax year."

I might have misinterpreted but does this mean there is no point saving anything over £4000? You get a max of £1000 bonus per year from a max saving of £4000. So adding another £4000 of savings in the next tax year with a total of £8000 would still mean £1000 for that year when £4000 would do?!

Or does this mean max £1000 bonus per £4000 saved per year e.g, Year 2 £8000=£2000, Year 3 £12000= £3000, Year 4 £16000=£4000.

This last bit I think isn't the case as:
"What's the max bonus £32,000 (max contribution over 32 years)"
So £32000/32 years = £1000 per year.

If this could be clarified it'll be much appreciated.

Many thanks

masonic

kaisquared wrote: »

If this could be clarified it'll be much appreciated.

If you pay in £4000 in the first year, you'll get a one-off £1,000 bonus. To get any bonus in the next year you will have to pay in more money and you'll get a 25% bonus on what you pay in up to the limit.

kaisquared

Thanks for this Masonic.

In that case, I assume there are penalties for withdrawing money from the Lifetime ISA? I mean otherwise at the start of year 2, someone can take out the £4000 in the ISA from year 1 and put it straight back in so it would count as 'new' money for the year 2 allowance and then get the £1000 at the end of the year?

colsten

The LISA bonus must be re-paid if you don't use the money for a property purchase and/or keep it until you are 60. You will also have to pay a 5% penalty - I think it's 5% of the amount being withdrawn.

kaisquared

Ah ok this would make sense.

Thanks for the help!

leonardo

Hi All,

I know I've left it late, but I'm still hoping for some guidance please.

I want to open a Help to Buy ISA.

I have £1800 in a current account.

1) If I open one today - can I still get the £400 bonus that has been mentioned?

2) If not, am I better off waiting a few days and open this ISA after the 5th?

3) Would there be any advantages to opening it before the deadline?

3) Any general advice on my scenario would be appreciated.

Leo

badger09

leonardo wrote: »

Hi All,

I know I've left it late, but I'm still hoping for some guidance please.

I want to open a Help to Buy ISA.

I have £1800 in a current account.

1) If I open one today - can I still get the £400 bonus that has been mentioned?

2) If not, am I better off waiting a few days and open this ISA after the 5th?

3) Would there be any advantages to opening it before the deadline?

3) Any general advice on my scenario would be appreciated.

Leo

Assuming you qualify for a HTB ISA, it makes no difference whether you open it today, tomorrow, or on/after on 6th April when the new tax year starts. You will still get the bonus - if you qualify!

The difference in interest you would gain by opening today would be a few pennies.

If you've paid into a cash ISA since 6th April 2015, you can't pay into a HTB before 6th April.

langrobbie

Hello, was wondering if anyone has any experience with actually obtaining the government bonus at completion?

I'm nearing completion in a house purchase, and my solicitor (a pretty big well known and established firm) is saying they don't do the help to buy ISA, i.e. they wont request the government bonus.

My solicitor says it's because they are not on the panel of approved solicitors for Halifax. I called Halifax and they say there is no panel of approved solicitors, anyone can do it.

I guess there is no obligation on my solicitor to do it, but if they aren't willing, then can I get someone else to do it? Seems like I have nice government bonus waiting for me but I can't get hold of it!

Thanks! Rob

sufcboy

Hi all,

Looking at opening a htb isa this week, but was wondering which bank would I be best going with? I know Halifax and Santander have the best rates but which am I better going with or doesn't it matter.
Also I currently have a cash isa open with Barclays, as I won't get any interest paid on it once I open the htb isa what am I best doing with this?

Thanks

badger09

sufcboy wrote: »

Hi all,

Looking at opening a htb isa this week, but was wondering which bank would I be best going with? I know Halifax and Santander have the best rates but which am I better going with or doesn't it matter.
Also I currently have a cash isa open with Barclays, as I won't get any interest paid on it once I open the htb isa what am I best doing with this?

Thanks

Halifax & Santander HTB ISAs are both @ 4% but Santander's rules on depositing are less rigid.

You will still get interest on the money in your Barclays ISA, though the rate will be pitiful:(

You can get far more interest in various current accounts, up to 5% and up to 6% in regular savers. Lots of information around the forum:)