New Help To Buy Account And LISA

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Hi,

I stupidly didnt start saving in the past, and now want to make the most of what I can.

Can anyone tell me if this plan is correct or flawed?

1st March 2017 - Open Help to Buy ISA with £1200
1st April 2017 - Monthly payment to H2B £200

6th April 2017 - Open LISA and make monthly payments of £333.33

Continue to pay £200 into H2B and £333.33 into LISA until 1st March 2018.

Mid March 2018 Transfer H2B which will be balance of £3600 I put in plus £900 (the 25% bonus) and any interest to the LISA.

£1400 of the transferred from H2B to LISA would not count towards yearly amount as this was in the H2B before 6th April 2017, the rest (£3100+interest) would count towards yearly? Is this right

But hold on now im confused cause how would I be able to transfer the H2B over if its gonna put me over my yearly amount?

Im sure you can gather what im trying to achieve here if anyone can try and unpick this for me and make it make sense?
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  • Ed-1
    Ed-1 Posts: 3,906 Forumite
    First Anniversary Name Dropper First Post
    edited 23 February 2017 at 11:18PM
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    quinnj09 wrote: »
    Hi,

    I stupidly didnt start saving in the past, and now want to make the most of what I can.

    Can anyone tell me if this plan is correct or flawed?

    1st March 2017 - Open Help to Buy ISA with £1200
    1st April 2017 - Monthly payment to H2B £200

    6th April 2017 - Open LISA and make monthly payments of £333.33

    Continue to pay £200 into H2B and £333.33 into LISA until 1st March 2018.

    Mid March 2018 Transfer H2B which will be balance of £3600 I put in plus £900 (the 25% bonus) and any interest to the LISA.

    £1400 of the transferred from H2B to LISA would not count towards yearly amount as this was in the H2B before 6th April 2017, the rest (£3100+interest) would count towards yearly? Is this right

    But hold on now im confused cause how would I be able to transfer the H2B over if its gonna put me over my yearly amount?

    Im sure you can gather what im trying to achieve here if anyone can try and unpick this for me and make it make sense?

    Some observations:
    • why pay into the LISA monthly?
    • you do not get a bonus on the Help to Buy ISA money before it goes into the LISA. The bonus is added afterwards, as if it was just new money paid into the LISA so the £900 doesn't count towards the LISA allowance.
    • the combination of amount transferred in from Help to Buy ISA from money paid in in 2017/18 + LISA contributions cannot exceed £4,000. You can transfer part of the Help to Buy ISA to LISA.
  • quinnj09
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    Ed-1 wrote: »
    Some observations:
    • why pay into the LISA monthly?
    • you do not get a bonus on the Help to Buy ISA money before it goes into the LISA. The bonus is added afterwards, as if it was just new money paid into the LISA so the £900 doesn't count towards the LISA allowance.
    • the combination of amount transferred in from Help to Buy ISA from money paid in in 2017/18 + LISA contributions cannot exceed £4,000. You can transfer part of the Help to Buy ISA to LISA.


    1) Im not sure I'm trying to understand this and work out the best way, is it even worth me doing help to buy if I'm gonna do LISA?

    Im very confused even though I just spent the last 3 hours reading into it all
  • greenglide
    greenglide Posts: 3,301 Forumite
    First Anniversary Combo Breaker Hung up my suit!
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    The earlier you start the more you can accumulate so the more bonus you get.

    Why not open the HTB ISA now before the end of February so you can get an extra £200 in (subject to having the money available now).
  • Eco_Miser
    Eco_Miser Posts: 4,708 Forumite
    Name Dropper First Post First Anniversary Combo Breaker
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    You could possibly open an HTB ISA in February, with £1200, and further £200s in March and April (first five days), giving you £1600 to transfer into the LISA, giving you a bonus on £5600 when it is paid in April 2018, rather than just £4000 if you only used the LISA.
    Eco Miser
    Saving money for well over half a century
  • quinnj09
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    Eco_Miser wrote: »
    You could possibly open an HTB ISA in February, with £1200, and further £200s in March and April (first five days), giving you £1600 to transfer into the LISA, giving you a bonus on £5600 when it is paid in April 2018, rather than just £4000 if you only used the LISA.

    This is what I was just thinking, but is the h2b bonus not paid when it's transferred to the LISA

    Does anyone see why this wouldn't work or any better way to maximise bonus in my situation?
  • Ed-1
    Ed-1 Posts: 3,906 Forumite
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    quinnj09 wrote: »
    This is what I was just thinking, but is the h2b bonus not paid when it's transferred to the LISA

    Does anyone see why this wouldn't work or any better way to maximise bonus in my situation?

    You do not get the Help to Buy ISA bonus as you are not using the H2B ISA to buy a home. However you will get the LISA bonus on that money if it's transferred in to the LISA.

    You get a bonus on all money contributed to the LISA which is paid in April 2018. The bonus is then paid monthly on all contributions made in 2018/19 onwards.
  • Mike_320
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    It is definately worth opening the HtB ISA now. It is likely to have a better interest rate than the LISA and you get the bonus on the interest which you do not get with a LISA. There is also the problem that you do no know who will be offering a LISA from April.
  • quinnj09
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    Ed-1 wrote: »
    You do not get the Help to Buy ISA bonus as you are not using the H2B ISA to buy a home. However you will get the LISA bonus on that money if it's transferred in to the LISA.

    You get a bonus on all money contributed to the LISA which is paid in April 2018. The bonus is then paid monthly on all contributions made in 2018/19 onwards.
    Mike_320 wrote: »
    It is definately worth opening the HtB ISA now. It is likely to have a better interest rate than the LISA and you get the bonus on the interest which you do not get with a LISA. There is also the problem that you do no know who will be offering a LISA from April.

    Ok so im thinkin the best plan is:

    25th Feb 2017 - Open Help to Buy ISA with £1200
    1st March 2017 - Monthly payment to H2B £200
    1st April 2017 - Monthly payment to H2B £200
    6th April 2017 - Open LISA with £333.33 & transfer H2B (£1600) to LISA

    Continue to pay £333.33 into LISA each month

    At end of year 1, this would mean I would get £25% bonus on 5599.96?

    I think this would give me the most bonus considering I can only start this now and not in the past?
  • Ed-1
    Ed-1 Posts: 3,906 Forumite
    First Anniversary Name Dropper First Post
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    quinnj09 wrote: »
    Ok so im thinkin the best plan is:

    25th Feb 2017 - Open Help to Buy ISA with £1200
    1st March 2017 - Monthly payment to H2B £200
    1st April 2017 - Monthly payment to H2B £200
    6th April 2017 - Open LISA with £333.33 & transfer H2B (£1600) to LISA

    Continue to pay £333.33 into LISA each month

    At end of year 1, this would mean I would get £25% bonus on 5599.96?

    I think this would give me the most bonus considering I can only start this now and not in the past?

    Is there any reason for the £333.33 monthly payment? Why not just pay in £4000 in one go?
  • quinnj09
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    Ed-1 wrote: »
    Is there any reason for the £333.33 monthly payment? Why not just pay in £4000 in one go?

    I dont have a spare £4000, so i just split that between 12 payments (12 months), whats the benefit for me getting the full £4000 in ASAP?
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