Help to buy & LISA bonus loophole???

Emb94

So, when looking into both the H2B isa and LISA, they both offer a government bonus towards a house, but you can only use one of these means to claim the bonus. But with the LISA, you can also save for retirement and get the bonus then.

Does this mean you could buy a house using a H2B isa and claim the bonus. Then proceed to keep adding to your LISA and gain the bonus on your retirement too? - as there is no mention that once the house bonus has been used, it would then strip the potential bonus for retirement aswell?

Just I cant find any specific wording on this, and it would just be interesting to know incase it helps with decision making in the future when you are saving into both accounts and are then looking to cash out on one for a house.

Ed-1

Emb94 wrote: »

So, when looking into both the H2B isa and LISA, they both offer a government bonus towards a house, but you can only use one of these means to claim the bonus. But with the LISA, you can also save for retirement and get the bonus then.

Does this mean you could buy a house using a H2B isa and claim the bonus. Then proceed to keep adding to your LISA and gain the bonus on your retirement too? - as there is no mention that once the house bonus has been used, it would then strip the potential bonus for retirement aswell?

Just I cant find any specific wording on this, and it would just be interesting to know incase it helps with decision making in the future when you are saving into both accounts and are then looking to cash out on one for a house.

You get bonuses as you go along with the LISA. They're added to the account on a rolling monthly basis as you contribute. You can withdraw at any time but only first-time house purchase counts as a penalty-free withdrawal unless you are at least 60 years of age when you can withdraw penalty-free.

There's nothing stopping you getting the bonus on the Help to Buy ISA as well as getting bonuses on the LISA but you'd only be able to access them penalty-free when you get to 60.

badger09

It isn't a loophole though.

Its the way LISAs are intended to work.

Emb94

Thought it was the case, but doesn't make itself clear in the paperwork as most financial advice just highlights the bonus when buying a house and doesn't state what happens when you have both accounts open.

Guess it's not necessarily a loophole, just it makes you think strategically when selecting which bonus to use towards a house. So you're better off using a maxed out h2b +bonus towards your house, and continue putting in the full £4000 into your Lisa to cash out at 60. - if you can afford to do that that is! :rotfl:.

eskbanker

Emb94 wrote: »

Guess it's not necessarily a loophole, just it makes you think strategically when selecting which bonus to use towards a house. So you're better off using a maxed out h2b +bonus towards your house, and continue putting in the full £4000 into your Lisa to cash out at 60. - if you can afford to do that that is! :rotfl:.

It's not necessarily as simple as that though - in many cases it'll be more advantageous to use a pension rather than a LISA for the long-term stuff, which could in turn favour using a LISA instead of HTB for the first property purchase....

masonic

Emb94 wrote: »

Guess it's not necessarily a loophole, just it makes you think strategically when selecting which bonus to use towards a house. So you're better off using a maxed out h2b +bonus towards your house, and continue putting in the full £4000 into your Lisa to cash out at 60. - if you can afford to do that that is! :rotfl:.

The more common strategy is to fill both accounts if you can, use the HTB ISA as a savings account, make the penalty free withdrawal from the LISA and combine with the balance of the HTB ISA (without bonus) when buying, then continue to use the LISA for retirement. It will take a lot longer to get an equivalent sum built up in the HTB ISA alone. Meanwhile house prices are likely to continue rising.

20SmthngSver

If you use the HTB bonus, then you can't claim the LISA bonus for a house. But will continue to get the bonuses toward post 60 withdrawal. That's just how it works, it's not a loophole.

Once you're a homeowner, your options with a LISA go from 2 to 1.

Malthusian

Emb94 wrote: »

Thought it was the case, but doesn't make itself clear in the paperwork as most financial advice just highlights the bonus when buying a house and doesn't state what happens when you have both accounts open.

Any guidance about LISAs that forgets to mention that the bonus is also applicable if you reach age 60 is wrong. As others have said, this is how LISAs are intended to work - a "bonus" if you leave the money there until you buy a house or reach age 60.

If you claim the house-purchase bonus on one lot of money and then save more money into an LISA and claim the bonus at 60, those are two different pots of money, you're not getting the bonus on the same money twice.