Worth transferring in Help to Buy ISA to LISA?

bowlhead99

aj23 wrote: »

I thought it mean that I could add my HTB ISA in full, as well as add another £4,000 for this years contributions, hence the £9,900 figure. I didn't realise what I had add to this years HTB allowance came out of the LISA allowance.

If you don't transfer any current year HTB money into the LISA then the LISA will have an unrestricted £4k current year allowance.

But if you are putting 2017/18 money into the HTB and then transferring any of the 2017/18 money over into the LISA, it will be counted against the £4k. Only the pre-2017/18 money that was in your HTB before the start of this financial year, gets a free pass into the LISA.

aj23 wrote: »

If I only want to transfer my pre 5 April 2017 contribution (so that my HTB stays open and retains my post 6 April 2017 contributions in it), do I have to transfer all of it or can I choose how much?

When you do an ISA transfer (whether conventional ISAs or HTB or LISA ones), one of the questions that the transferee ISA manager should ask you at the time you do your transfer request will be whether the amount you propose to transfer is a) all the amount and close the old account; b) just the current year balance, or c) just some amount out of the prior years' balances. The way they ask the question or the boxes they let you fill out to explain what money you want to move, will vary from place to place - but ISA managers have to track this stuff in their systems anyway because current year money (within ISA types) has to stay together although prior year money doesn't.

ISA managers have to allow you to transfer money out, but don't have to offer 'partial' transfers if they don't want to (you might like to check the T&Cs).

Really though if you want to maximise the amount of bonus you can get for a property purchase (which presumably you do, which is why you opened an HTB a couple of years ago and maxed it out since) it makes sense to move it into a LISA which allows your balances to build up faster (£4k/ yr rather than £200/mth). While it's perfectly possible to have a HTB ISA *and* a LISA running separately beyond 2017/18, you can only use the bonus on one of them to buy a property - and the one you'd choose will likely be the LISA as it'll be bigger, so there is no real point having £2400 of 2017/18 HTB contributions 'stuck' in the HTB going forward.

aj23_2

bowlhead99 wrote: »

If you don't transfer any current year HTB money into the LISA then the LISA will have an unrestricted £4k current year allowance.

But if you are putting 2017/18 money into the HTB and then transferring any of the 2017/18 money over into the LISA, it will be counted against the £4k. Only the pre-2017/18 money that was in your HTB before the start of this financial year, gets a free pass into the LISA.

When you do an ISA transfer (whether conventional ISAs or HTB or LISA ones), one of the questions that the transferee ISA manager should ask you at the time you do your transfer request will be whether the amount you propose to transfer is a) all the amount and close the old account; b) just the current year balance, or c) just some amount out of the prior years' balances. The way they ask the question or the boxes they let you fill out to explain what money you want to move, will vary from place to place - but ISA managers have to track this stuff in their systems anyway because current year money (within ISA types) has to stay together although prior year money doesn't.

ISA managers have to allow you to transfer money out, but don't have to offer 'partial' transfers if they don't want to (you might like to check the T&Cs).

Really though if you want to maximise the amount of bonus you can get for a property purchase (which presumably you do, which is why you opened an HTB a couple of years ago and maxed it out since) it makes sense to move it into a LISA which allows your balances to build up faster (£4k/ yr rather than £200/mth). While it's perfectly possible to have a HTB ISA *and* a LISA running separately beyond 2017/18, you can only use the bonus on one of them to buy a property - and the one you'd choose will likely be the LISA as it'll be bigger, so there is no real point having £2400 of 2017/18 HTB contributions 'stuck' in the HTB going forward.

Thank you. I live outside London but there aren't any properties less than 250k where I live, so I opened the HTB purely for the interest rate.

I already have £4,000 set aside for this tax years contribution allowance to the LISA.

I was thinking of only transferring my previous tax year contribution from the HTB to the LISA to get the bonus on it, and keeping the HTB open with this years contribution and building it back, because I get 4%. If I do this, my HTB balance will be back to £5,500 in 12 months and I'll get another £200 interest payment, like I will tomorrow. That way I'm pretty much maximizing both of them. Santander will let me make a partial transfer out.

bowlhead99

aj23 wrote: »

I was thinking of only transferring my previous tax year contribution from the HTB to the LISA to get the bonus on it, and keeping the HTB open with this years contribution and building it back, because I get 4%.

Seems reasonable if the ongoing contributions of £200pm into the HTB in tax year 2018/19 and beyond doesn't prevent you from being able to afford to max out the £4k pa into the LISA (which is the one that'll be ultimately paying you the bonus).

I suppose if you are going to be spending £300k+ on the property you are probably saving for it at more than £4k per year, so probably not an issue. Obviously there are other high interest accounts available - e,g. if you have £2400 from this year's HTB by end of March, you can stick it in a Nationwide current account paying 5%, and then your incremental £200pm can go in a Regular Saver account with Nationwide or First Direct or M&S at 5%, and the HTB with it's 4% becomes less attractive. But the advantage of keeping the HTB is that you don't need to empty it every year if you don't want to, whereas these regular-saver type accounts expire and need to be started again.

But basically what you are saying seems fine

aj23_2

bowlhead99 wrote: »

Seems reasonable if the ongoing contributions of £200pm into the HTB in tax year 2018/19 and beyond doesn't prevent you from being able to afford to max out the £4k pa into the LISA (which is the one that'll be ultimately paying you the bonus).

I suppose if you are going to be spending £300k+ on the property you are probably saving for it at more than £4k per year, so probably not an issue. Obviously there are other high interest accounts available - e,g. if you have £2400 from this year's HTB by end of March, you can stick it in a Nationwide current account paying 5%, and then your incremental £200pm can go in a Regular Saver account with Nationwide or First Direct or M&S at 5%, and the HTB with it's 4% becomes less attractive. But the advantage of keeping the HTB is that you don't need to empty it every year if you don't want to, whereas these regular-saver type accounts expire and need to be started again.

But basically what you are saying seems fine

I can afford to max out both HTB and LISA each year, and I do save elsewhere currently too in regular savers which have much higher balance caps than those you list and so return me more interest, but I'm happy to make provisions to divert saving into the LISA as well. And my HTB compounds the interest year on year, so it pays out more than those 12 month term regular savers even in year one because of the additional £1,000 deposit.

If I was getting 2% like at Barclays or Nationwide etc, I'd transfer the lot without hesitating, but that 4% is like a carrot dangling, and the interest forecasts would return me hundreds in the following years, so I'm reluctant to close it.

Thanks for your help. :beer:

Add: Actually I just checked and I made a deposit of £200 on 4 April 2017, so that's £3,678 I can transfer.

Alexland

aj23 wrote: »

Add: Actually I just checked and I made a deposit of £200 on 4 April 2017, so that's £3,678 I can transfer.

Are you going to do it ASAP then?

https://www.skipton.co.uk/savings/isas/lifetime-isa/transfers

If you’re thinking about transferring an existing Help to Buy ISA or other ISA into your Skipton Cash Lifetime ISA in this tax year, our window to do so closes on 2 March 2018. After this date, you will no longer be able to apply to transfer into your Skipton Cash Lifetime ISA in the 2017/18 tax year.

Alex.

aj23_2

Alexland wrote: »

Are you going to do it ASAP then?

https://www.skipton.co.uk/savings/isas/lifetime-isa/transfers

If you’re thinking about transferring an existing Help to Buy ISA or other ISA into your Skipton Cash Lifetime ISA in this tax year, our window to do so closes on 2 March 2018. After this date, you will no longer be able to apply to transfer into your Skipton Cash Lifetime ISA in the 2017/18 tax year.

Alex.

I've done it now. You had to initiate it online by 11:59pm tonight. I've posted my printed form and they will get it tomorrow.

stevie11

I have an interest in this subject but may have left it too late if applications have now closed. Basically both of my Sons have HTB Isas with Halifax paying in the monthly maximum so have just short of £6k each.

I spoke to Halifax branch staff yesterday and tbh the discussion was pointless as they knew nothing about the LISA.

So I am trying to help my Sons get the most from their savings, have all applications closed as of yesterday or is it still possible to make any transfer before the end of 17/18 tax year? I think a little more research is needed on my part.
Thanks

Alexland

stevie11 wrote: »

I have an interest in this subject but may have left it too late if applications have now closed. Basically both of my Sons have HTB Isas with Halifax paying in the monthly maximum so have just short of £6k each.

I spoke to Halifax branch staff yesterday and tbh the discussion was pointless as they knew nothing about the LISA.

So I am trying to help my Sons get the most from their savings, have all applications closed as of yesterday or is it still possible to make any transfer before the end of 17/18 tax year? I think a little more research is needed on my part.
Thanks

It has not closed the deadline was extended - today is the last day with Skipton.

https://www.skipton.co.uk/savings/isas/lifetime-isa/transfers

If you’re thinking about transferring an existing Help to Buy ISA or other ISA into your Skipton Cash Lifetime ISA in this tax year, our window to do so closes on 2 March 2018. After this date, you will no longer be able to apply to transfer into your Skipton Cash Lifetime ISA in the 2017/18 tax year.

aj23_2

stevie11 wrote: »

I have an interest in this subject but may have left it too late if applications have now closed. Basically both of my Sons have HTB Isas with Halifax paying in the monthly maximum so have just short of £6k each.

I spoke to Halifax branch staff yesterday and tbh the discussion was pointless as they knew nothing about the LISA.

So I am trying to help my Sons get the most from their savings, have all applications closed as of yesterday or is it still possible to make any transfer before the end of 17/18 tax year? I think a little more research is needed on my part.
Thanks

The deadline is today to do it in branch, or open a LISA online and initiate the transfer though Skipton's online banking, print the form and post it.

Halifax won't know about the LISA because they don't offer it.

Today is the last today in order to mark a partial or whole transfer of the HTB into a LISA to ensure it's processed before 5 April 2018.

stevie11

Alexland and aj23 many thanks for your replies. Firstly my Sons don't have a Skiption LISA so that would mean they both have to open one first then transfer the Halifax HTB by the end of the day. I think it will be cutting it fine considering one only get's in after 7pm and the other is away at Uni. So I will have to do the leg work.

Are you aware of any other providers that have deadlines further towards the end of March? In that time I could contact the provisder and gain further advice without rushing into a decision.

Thanks