HTB Isa with Junior Isa maturing soon

MoreDashThanCash

Hi,
My son turns 18 next month so his Junior Isa will mature. I'm wondering what to advise him to do with the balance. He already has a HTB. Both Isas are with the Halifax.

Would it be a sensible idea to maybe open a Lifetime Isa and transfer his HTB Isa in? Can he use his Junior Isa cash to top up a Lifetime Isa by transferring some of it in before April 2018? What would then happen to the rest?

I'm a bit confused about what the rules are re. HTB and how many Isas are permitted. Any help will be gratefully received.

Thanks.

xylophone

https://www.halifax.co.uk/isas/cash-isas/junior-cash-isa/
When the child reaches 18 the account matures to an adult cash ISA where the child can continue to save tax free.


He can choose to stay with the Halifax or transfer to another provider or withdraw the cash to save elsewhere.

http://blog.moneysavingexpert.com/2017/03/21/switch-help-buy-isa-lifetime-isa/

https://www.moneysavingexpert.com/savings/lifetime-ISAs

Only Skipton BS is currently offering a cash LISA.

MoreDashThanCash

Thanks for the links. So he can definitely transfer the Junior Isa to another provider even though he will be contributing to the HTB Isa, because the balance on the Junior one isn't 'new' money?

Alexland

Yup. Even if it was new money an adult can contribute £20k to ISAs per tax year.

If going down the HTB to LISA transfer route then I would suggest performing the transfer first before making additional contributions to fill it up as the interest earned this year will also count towards the £4k limit and you won't know the exact remaining allowance until the transfer completes.

If he is only 18 then be aware that if he doesn't buy a house eventually and withdraws from the LISA before the age of 60 the bonus will be lost and there is a small penalty.

Also if he is only 18 and may not buy the house for 5-7 years it might be worth considering a balanced risk investment in a S&S LISA for the next few years to get a potentially better return than cash?

I held about 1/3 of my first property deposit in shares and it gave me a small boost. Even when share prices dropped in the financial crisis so did house prices so the reduced deposit would have still bought a higher proportion of the property.

Alex