Help to Buy ISA, Lifetime ISA or other

Teenster

Hello

I'm 42 years old and have recently married. He is 45.

For the first time in my life I am relatively comfortable with money. If we are very careful with our spending over the next coming year there is a chance we could save enough for a deposit on a house.

Now I am not sure of the best way to save for this. I opened a help to buy ISA a few years ago and it is still sitting empty and I also opened a Lifetime ISA before I was 40 with a penny and it is still sitting empty.

I am hoping to save around £1k a month from the beginning of next year.

The thing is I don't know if we will even get a mortgage at our age. I suspect if we did the mortgage would need to go in my name.

I understand that if I save in the help to buy ISA, even if we didn't get a mortgage, I could withdraw all the money and nothing would be lost.

However if I saved in the lifetime ISA then didn't get a mortgage and decided to use the money some other way then I would be penalised for withdrawing it.

I hope this makes sense!

I guess saving in the help to buy ISA is good as there is no risk but we will need to save more than the £200 per month and I'm not sure wheres best to save the extra.

Any advice or guidance would be gratefully received.

Thanks

IanSt

I don't qualify for either type of those ISAs so don't actually have them, but the Lifetime ISA certainly does have that penalty if you don't use it for a house purchase or retirement purposes.

Personally I think that saving for retirement is a very good reason to put away money, so that would not stop me from putting the money into the Lifetime ISA - though if I thought I wouldn't get a mortgage then I'd more likely use the vanilla pension route.

Perhaps you need to pop into a building society/bank to get an idea of the likelihood that they would offer you a mortgage.

But what actually would you want to use the money for if you aren't able to get a mortgage? And how instant would you want to be able to access the money put away?

If you decide not to put the extra money into a Lifetime ISA then personally I'd start off with using some Regular Savings accounts - these offer better than usual rates and are ideal for putting regular amounts of money away for a year. Some of the regular accounts will allow you to close them early, but be very careful if you think you will need to access the money as some won't and there may be interest penalties to forfeit.

Take a look at https://forums.moneysavingexpert.com/discussion/5776240/regular-saver-thread-new-and-restarted - page 1 is updated with the latest accounts.