Moving money from Help To Buy ISA into Lifetime ISA?

bp5678

Nearly a year ago I set up a Help To Buy ISA and a lifetime ISA. I've been putting £200 into the HTB each month with the plan of then moving it all into the lifetime ISA, however I can't remember why I decided to do this/the benefit of it. I've been tryingto look this up and can't find the answer. Anyone know? Thanks

diggingdude

You can withdraw the help to buy money, put it into lifetime ISA and if there is less money than £4k you can top it up to £4k for a £1k bonus. No more than £4k can go into a Lisa in any tax year. The only bonus I can see in putting it into the H2B ISA for a year is the higher interest.

DD265

You have to have had the LISA open for 12 months before you can use it to purchase a property. Additionally, to withdraw funds within 12 months or not to buy a property (or for retirement) would incur a penalty as well as losing the 25% bonus.

So a H2B ISA is a bit more flexible, but you can't get as much bonus out of it. That's only relevant though if you can afford to pay more than £200 a month in.

Having just gone through the withdrawal process for both accounts (my husband had H2B, I had LISA), the H2B ISA was a lot quicker and easier! But we've had a significantly bigger bonus out of the LISA as we paid the maximum in.

bp5678

diggingdude wrote: »

You can withdraw the help to buy money, put it into lifetime ISA and if there is less money than £4k you can top it up to £4k for a £1k bonus. No more than £4k can go into a Lisa in any tax year. The only bonus I can see in putting it into the H2B ISA for a year is the higher interest.

Hi yes I think that was my plan (as I say I opened this almost a year ago so couldn't remember my reasoning behind it). Thanks for clearing this up.

bp5678

diggingdude wrote: »

You can withdraw the help to buy money, put it into lifetime ISA and if there is less money than £4k you can top it up to £4k for a £1k bonus. No more than £4k can go into a Lisa in any tax year. The only bonus I can see in putting it into the H2B ISA for a year is the higher interest.

DD265 wrote: »

You have to have had the LISA open for 12 months before you can use it to purchase a property. Additionally, to withdraw funds within 12 months or not to buy a property (or for retirement) would incur a penalty as well as losing the 25% bonus.

So a H2B ISA is a bit more flexible, but you can't get as much bonus out of it. That's only relevant though if you can afford to pay more than £200 a month in.

Having just gone through the withdrawal process for both accounts (my husband had H2B, I had LISA), the H2B ISA was a lot quicker and easier! But we've had a significantly bigger bonus out of the LISA as we paid the maximum in.

Hi,

As I say, i've had the HTB and the LISA for nearly a year (each). I'm therefore going to move the HTB money into the LISA and ensure it has £4000 in it to get the greatest benefits. I've been adding £200 to the HTB each month.

I'm looking to buy a property towards the end of this year.

bp5678

Just revisiting this as it's coming to the end of the tax year and I'm paranoid I'm going to do this wrong. I'm buying at the end of this year (Dec 2019).

-I have £15k in my current account.
- I have £3400 in my HTB (paying in £200 monthly).
- I have £1 in my LISA.

1. Should I move the £3400 into my LISA as well as moving 'the difference' (£600) from my current account into my LISA?
2. Alternatively the other option is to just move £4k straight into my LISA and not move any from my HTB?

diggingdude

Doesn't matter where the 4k comes from, just get it in before the annual deadline

bp5678

diggingdude wrote: »

Doesn't matter where the 4k comes from, just get it in before the annual deadline

Thanks but given the choice is there any benefit from:
A) Moving the money from the HTB into the LISA (and paying the different with my current account)
Moving the £4k direct from my current account?

pink_pirlie

Interest rate would affect my choice...
What you are getting on your current account v what you are getting on the H2B LISA. Withdraw whichever is giving you the lowest interest rate.

Are you making the most of your money with 15k sat in your current account?

Do you have regular 5% savers?

Save the rest in as high an interest instant access saver as you can find (looking around 1.5%ish atm). You might also think about whether some of it can be put into a set term savings product - ie lock it away for 1,2,3... years. This will usually give you a bit extra interest because you can't withdraw it.
You don't want to lock it all away so spend some time reading the savings pages on here.

And make that deposit ASAP.