Closing a Help-To-Buy ISA

edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
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amandabailey001amandabailey001 Forumite
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edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
I have had my help to buy ISA for a couple of years now and I want to take the money out and close the account (without purchasing a property). I do not intend to claim the government bonus.

Is it better to transfer the money to my other bank account and keep the ISA open with say a balance of £1 and then when i am ready to save again, transfer to another ISA product or do i just close the ISA completely?

The amount I have saved will not pay interest over the personal allowance.

Replies

  • AlexlandAlexland Forumite
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    It's your choice really but remember that if you later re-open a HTB ISA you would again be able to start with a new £1200 lump sum contribution but you can only open a HTB ISA until 30th November 2019 as the product is being retired in favour of the newer Lifetime ISAs.

    If you think it's likely you would buy a house in the near future are you sure you need to withdraw the money now and forfeit the bonus on the amount you have already saved? Have you considered if any short term credit arrangements might enable you to avoid this?

    Alex.
  • amandabailey001amandabailey001 Forumite
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    Thanks Alex.

    Basically i won't need to claim the government bonus therefore the ISA is nil and void. The likelihood is that i will open a different type of ISA product in the future, just not a help-to-buy one.
  • AlexlandAlexland Forumite
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    Out of interest (tell me to MYOB if being too nosy) why will you not need to claim the government bonus?
  • edited 13 June 2018 at 11:18AM
    amandabailey001amandabailey001 Forumite
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    edited 13 June 2018 at 11:18AM
    The property is above 250,000 but will not be available for some time yet, therefore doesn't qualify but the money in the account is needed over the next year.
  • mije1983mije1983 Forumite
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    What interest rate are you getting on the HTB ISA? Quite often they are higher than a regular ISA so surely it makes sense to leave it in there and take it out as and when you need it. Whether or not you take the bonus you still get the interest.

  • amandabailey001amandabailey001 Forumite
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    I think its just gone down to 3.5% which is still a better interest rate than most. Can i open another cash ISA if this one is still active?
  • mije1983mije1983 Forumite
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    I think its just gone down to 3.5% which is still a better interest rate than most. Can i open another cash ISA if this one is still active?

    Yes but you can only contribute to 1 or the other in a tax year.

    If you are getting 3.5% then that beats any other cash ISA by a long, long way. Unless you are going to save more than £200 a month in the new ISA then it makes no sense to move it from a higher interest account to a lower one. I wouldn't even be considering it if the monthly savings limit won't be hit.

    I'd be keeping it until I bought a property and then moving it to another ISA/account. Whether or not you have any intention to use it towards a property doesn't matter, by the current rules as you are a FTB you are still entitled to have a HTB ISA.

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