Help To Buy ISA & Lifetime ISA

Dan15l

I NEED HELP!

Can I open a 'Help To Buy ISA & 'Lifetime ISA' in the same Tax Year ?
I have been told different answers from different banks and financial advice sites.

'Barclays' have told me I cannot do this in the same tax year, whereas 'Skipton' and 'MoneyBox' have told me yes I can do this in the same tax year so I am unsure what to do :mad:

I have also asked other companies such as 'The Money Advice Company' where they have told me 'yes you can do this' and ' I am unsure why Barclays are saying this'.

As you can understand I would like to keep both open and use the 'Lifetime ISA' for a property and the 'Help To Buy ISA' for General savings or a future purchase.
I understand that the government only allow you to use the 25% bonus for one ISA towards a property new.
If using the 'Lifetime ISA' for anything other than a property can result in a penalty, however in my case, it will DEFINITELY be put towards a new property.

I have explained my reasoning behind the question below:

So I recently opened a 'Help To Buy ISA' with Barclays in August.
I plan on purchasing a property in the future and I am a first-time buyer
After looking around, including the very in-depth guide on MSE, I believed that their '2.58%' AER Variable would be the best choice.
(Including the Government 25% bonus max of £3,000)
So far I have put £1200 in the first month and ready to put the next installment of £200 in, the possible maximum equating to £3400 in year one.
Max Deposit: £1200 In first month + £200 every month.

HOWEVER . . .
After doing alot more research and speaking to current first-time buyers, I believe that the best option for first-time buyers is actually the 'Lifetime ISA', I have been looking on the MSE website and believe that 'MoneyBox' are currently doing the best rate at 1.4%.

Now the reason I believe that the 'Lifetime ISA' option is a better is because you get 25% Government bonus EVERY YEAR, with the maximum deposit being £4000 per tax year, this means an additional £1000 every year towards your property.
Max Deposit: £4000 before the tax year ends, no monthly caps.

In comparison, in my first year with the maximum deposit of '£3400' with the 'Help To Buy ISA' scheme is only £88 interest over the tax year.

Understandably the '2.58%' AER V at Barclays HTB' is greater than the '1.4% AER V Lifetime ISA' and that the Barclays total interest will increase year after year,however I still believe that the 'Lifetime ISA' is a better option as you can attain more money towards a property/mortgage deposit in a shorter period of time i.e £1000 a year :j

eskbanker

You can pay into both a HTB ISA and a LISA in the same tax year, as explained at https://www.gov.uk/individual-savings-accounts:

There are 4 types of ISA:

• cash ISAs
• stocks and shares ISAs
• innovative finance ISAs
• Lifetime ISAs

You can put money into one of each kind of ISA each tax year.

(HTB falls within cash ISAs).

Ignore anything Barclays tell you on this subject, they're renowned for not knowing what they're talking about.

As you've identified, a popular option for first-time buyers is to use the LISA for the property purchase (given the higher annual allowance earning the bonus), leaving the HTB as a generic savings account that pays better interest than vanilla ones, although you need to close it once you've bought your property and have become ineligible in doing so.

Dan15l

Thanks for your help 'eskbanker', much appreciated.