LISA & HTB ISA simple advice please

timwalker

We are using some of my just turned 18yr old daughters savings to open one, or maybe both, of the above.
We intend to open one with the max £1200 before the end of this month, and then add £200pm for the next couple of months to get the balance to what I Believe is the threshold to attract the bonus?

I am confused which one we should do, it will be used for a house purchase eventually, but a few years down the line once College & Uni is finished.

Can anybody simplify for me what would be best for her. We will add to it monthly and maybe the occasional lump sum.

Thanks.

grumiofoundation

If the money will definitely be used for a house purchase then the LISA is going to be better (higher house value outside London, higher amount can be contributed per year therefore higher bonus). The downside of the LISA is if the money is withdrawn for any other reason than buying a house (or retirement) then you pay a penalty, so if the money might be need to be accessed then this may not be the best. No penalty to withdrawing from HTB isa.

Max contribution to LISA is £4000 per year, max to HTB is £200 per month (£1200 in first month).

Can have and contribute to both HTB isa and LISA but only one can be used for purchase.

masonic

grumiofoundation wrote: »

Can have and contribute to both HTB isa and LISA but only one can be used for purchase.

That's not strictly true. Both can be used for the purchase. If the LISA is used then the bonus cannot be claimed on the HTB ISA, but the balance of the account can still be put towards the purchase.

MarkCarnage

Supplementary question to this.....

If a couple, both first time buyers, buy a house together, can they use a LISA which one has, and a HTB which the other one has, and still get both bonuses?

Have tried to google/search on this but not found an answer.

Many thanks.

timwalker

grumiofoundation wrote: »

If the money will definitely be used for a house purchase then the LISA is going to be better (higher house value outside London, higher amount can be contributed per year therefore higher bonus). The downside of the LISA is if the money is withdrawn for any other reason than buying a house (or retirement) then you pay a penalty, so if the money might be need to be accessed then this may not be the best. No penalty to withdrawing from HTB isa.

Max contribution to LISA is £4000 per year, max to HTB is £200 per month (£1200 in first month).

Can have and contribute to both HTB isa and LISA but only one can be used for purchase.

Thank you.

Presumably the penalty is loss of interest?

eskbanker

MarkCarnage wrote: »

Supplementary question to this.....

If a couple, both first time buyers, buy a house together, can they use a LISA which one has, and a HTB which the other one has, and still get both bonuses?

Have tried to google/search on this but not found an answer.

Many thanks.

Yes, mix'n'match is possible for a couple, this gets asked pretty regularly on this board:

https://forums.moneysavingexpert.com/discussion/comment/76379373#Comment_76379373
https://forums.moneysavingexpert.com/discussion/comment/76327579#Comment_76327579
https://forums.moneysavingexpert.com/discussion/comment/76289761#Comment_76289761
https://forums.moneysavingexpert.com/discussion/comment/76011806#Comment_76011806

eskbanker

timwalker wrote: »

Thank you.

Presumably the penalty is loss of interest?

No, it's much more punitive than that, at 25% of the gross amount withdrawn, so it's effectively loss of the bonus and then another 6.25% on top.

MarkCarnage

Yes, mix'n'match is possible for a couple, this gets asked pretty regularly on this board:

Thanks - I had tried a search with what I hoped were the right words, but didn't get anything that was specifically relevant up.