Son will be 18 in May 2018. He has a H2B ISA.... 26 February 2018 at 2:34PM edited 26 February 2018 at 3:00PM in ISAs & tax-free savings 1 reply 305 views

CGG

I hope someone can offer some assistance, please.

Yesterday, I'm certain I read somewhere on the forum info advice for 17 year olds who just miss out on having a LISA opened by the end of this tax year as they are not yet 18.

I may be dreaming it, as I cannot find the info today to fully gen up on this. It is of interest to me as my own 17 year old son, who has savings in a H2B ISA won't be 18 until May 2018.

Can anyone point me in the right direction, please. TIA.

bowlhead99

Really the advice is just keep plugging away at the HTB ISA instead if it pays a decent interest rate. But the offer to transfer an accumulated HTB ISA balance into a LISA and *not* have it come out of that year's £4k allowance is only available until the end of this tax year, which is no good for him as he can't have a LISA yet.

So effectively when he hits age 18 in May he will become eligible to put up to £4k into a LISA during the 2018/19 tax year - he can do that either out of new money or by transferring the HTB balance. LISA is certainly one to consider in the future as it allows more maximum contributions each year (not just the £200pm of the HTB) and allows you to get a higher total balance and therefore a higher total bonus. However there are penalties for withdrawal so he may not want to commit all his money until he knows he's definitiely likely to get a property before needing the money for something else.

Ahead of saving new money in the HTB account, he might find it more useful to use something like Nationwide's FlexOne Regular Saver account which pays over 3% interest p.a., and then could ultimately give him more money towards his LISA contributions than sticking with the HTB (assuming the HTB has lower interest rate).