H2B into LISA

eskbanker

New_Money_Saver wrote: »

I am interested in opening the Skipton cash LISA to "start the clock running" so to speak. I currently have several ISAs with my bank (HSBC): a H2B, a stocks and shares and an older cash ISA. I have already contributed to the H2B and stocks and shares ISAs this tax year. Can I still open the LISA?

Yes.

New_Money_Saver wrote: »

If so can I do it with £1 cash or would I need to do a balance transfer from one of my other ISAs?

You can do either.

New_Money_Saver wrote: »

I was reading the article and the posts above and am a bit unclear as to whether the LISA is considered a cash ISA. i.e. can I contribute to a cash, a LISA and a stocks and shares all within the same year?

LISAs are a separate type so you can contribute to the three you list.

New_Money_Saver wrote: »

I am not sure whether to move the H2B into the LISA or not. The base interest rate is better on the H2B and I don't know for definite that I'll be spending the money on a first home, but if I do it will likely be more expensive than the 250k limit for H2B. What is the general consensus on this?

The big plus of the LISA is the higher annual limit, so you can get a 25% bonus on £4K/year, which will typically outweigh the higher interest on less capital in a HTB. Plus the property value cap variation you refer to.

New_Money_Saver wrote: »

Additional query: if the government bonus is paid into the LISA yearly, does that mean it then begins to attract the base-rate interest in year 2?

Yes, but the bonus is only paid yearly this tax year, after that it's monthly.

throwaway12345

I'm sorry for what's probably a stupid question, but what's the benefit to keeping the Help to Buy ISA? Getting the 25% bonus on the £4k you put each year into the LISA but then also getting 3.5% (currently) on the £200/month you put into the Help to Buy ISA (even though you'll get no bonus on that money)?

where_are_we

The benefit of keeping the Halifax HTB ISA is its 3.5% interest rate (if you started one back in December 2015) which is much better than 1.15% which is the best cash ISA rate at the moment. The Halifax HTB ISA allows unlimited withdrawals and can be closed at any time and you get your capital + interest - you don`t need to purchase a house. However you can`t contribute to a cash ISA and a HTB ISA in the same tax year unless your provider allows "Split ISA`s". Instead of cash ISA`s you can have much better interest rates with current accounts and regular savers all covered by the £1000 personal saving allowance so no tax to pay on the interest.
So my daughter will use her Skipton LISA on house purchase to qualify for the 25% government bonus and close the Halifax HTB ISA (with savings from 6/4/17) just before this date because she will then have become a home owner and won`t be a first time buyer any more.

Largoh

I’m in the same boat; roughly.

I’ve got a Halifax H2B ISA at 3.5% interest rate. The house I’m planning on buying will be available in 2019, so I need to accelerate my savings but I can’t do that with the H2B and the interest rate is too good to give up.

If I was to open a LISA, would my best option be to stop paying in to the H2B (I assume I can’t pay in to both) but leave the money there and give up on the bonus, then start paying in to the LISA instead?

Of course I need to figure out which I can get the most bonus from as we’re probably looking at around 12 to 18 months until I need to use the savings, so that’s a max of £1000 from the LISA if I don’t transfer the H2B over.

I should add that there’s a possibility that the house I’ve put my name down on has a chance of being over £250k. The ones built so far are less, but the one I’ve gone for is slightly different plus it will be next year so I’d assume prices would increase.

Argh! It seems we’re on the edge. I have no idea what to do.

AlphaSatsuma

Your best option would be to transfer the H2B in a LISA and get the bonus on both assuming you have enough to maximise the higher contribution limit (4k)

AlphaSatsuma

I'm in an bit of a strange (stupid) situation, hopefully someone knows some of the technicalities to help me.

I have had a H2B since 2015 with Halifax and have maxed that out every month since opening.
When LISAs came along I read about the year wait thing before being able to use, so I opened a Nutmeg LISA with the minimum £100 thinking I could transfer my H2B in in April this year and get the bonus on it all in S&S. However I've just noticed that nutmeg for some reason are not allowing transfers.
I'm now looking to open a Skipton cash LISA so that I can transfer H2B in before April and get the extra bonus. However I don't know if I can transfer my Nutmeg LISA first to keep my original opening date and allow me to use sooner, if required? Or do I need to close the nutmeg one before the anniversary so I don't get charged and just open a new LISA and accept it?
Any ideas? Thanks in advance

Ed-1

Largoh wrote: »

I’m in the same boat; roughly.

I’ve got a Halifax H2B ISA at 3.5% interest rate. The house I’m planning on buying will be available in 2019, so I need to accelerate my savings but I can’t do that with the H2B and the interest rate is too good to give up.

If I was to open a LISA, would my best option be to stop paying in to the H2B (I assume I can’t pay in to both) but leave the money there and give up on the bonus, then start paying in to the LISA instead?

Of course I need to figure out which I can get the most bonus from as we’re probably looking at around 12 to 18 months until I need to use the savings, so that’s a max of £1000 from the LISA if I don’t transfer the H2B over.

I should add that there’s a possibility that the house I’ve put my name down on has a chance of being over £250k. The ones built so far are less, but the one I’ve gone for is slightly different plus it will be next year so I’d assume prices would increase.

Argh! It seems we’re on the edge. I have no idea what to do.

You can pay into both a H2B (cash) ISA and a Lifetime ISA.

If you want to keep the H2B for the interest rate, then you can transfer part of it into a LISA. Anything paid into the H2B ISA up to 5th April 2017 can be transferred into a LISA on top of the £4k you're allowed to pay into a LISA in 2017/18.

DanielleJH

Hoping someone can help clarify the LISA for me. My husband and I are both first time buyers who have held LISAs since September 2016. Am I definitely right in thinking we're entitled to £4000 each per tax year?

We are hoping to buy in January 2019 so will have held the accounts over two tax years. Does this mean we are able to save a maximum of £16000 between us with a maximum bonus of £4000 before April next year? We only have a few £100 each in them so far but are due bonuses in work before the end of April so hoping to get as close to £4000 each as possible.

DanielleJH

Sorry ignore me, I meant to post this in the normal LISA threads stupid phone!

Ashen

jamesunisaver wrote: »

"The impact on your LISA allowance of transferring a Help to Buy ISA in depends on when you contributed. All money contributed to a Help to Buy ISA before LISAs launched (ie, before 6 April 2017) can be transferred in without affecting your LISA allowance – and you can get both the max £1,000 LISA bonus, plus the bonus on that Help to Buy ISA cash on top. Any money you contribute to the Help to Buy ISA after LISAs launch however will eat up your LISA allowance."

The above paragraph was copied from Martin's page assisting with the technicalities of the Help to Buy Isa and Lifetime ISA.

I was reading this, and confused about the part that was bolded, because at first it appeared to contradict other advice given (i.e. that you can put £4000 into a LISA as well as £2400 into H2B this tax year, and also transfer only previous years H2B contributions to the LISA).

However, I think that bold part must be in the context of money you contribute to H2B in 2017-18 *and* transfer? All very confusingly written...