Need advice on help to buy ISA

Benshiolou12

Hi all, today I put my first 200 pound in my help to buy, and I have until the end of the month to transfer in a maximum of £1200. I was wondering is this worth it? I’m not the best with working out sums etc etc. Its the 2.5% nationwide help to buy ISA if this helps. Once I’ve put in the max for the the first calendar month I can then put a max of £200 in per month. Also would anyone know if it’s worth me getting a LISA once I turn a 18 as I am trying to save for my first house. Thanks, Ben 

eskbanker

Benshiolou12 said:

Hi all, today I put my first 200 pound in my help to buy, and I have until the end of the month to transfer in a maximum of £1200. 

Just to be clear, now you've paid in £200, you can pay in a maximum of £1,000 more this month, i.e. £1,200 in total.

Benshiolou12 said:

Also would anyone know if it’s worth me getting a LISA once I turn a 18 as I am trying to save for my first house.

Up to you - I see it's a year since I pointed you to the MSE article about LISAs so worth refreshing yourself on that and its comparison with HTB ISA, bearing in mind that you can only use the government bonus from one or the other (not both) when buying your first property.  Apart from anything else, it'll be worth opening a LISA with a token quid just to start the clock ticking and keep your options open (you're charged a withdrawal penalty if accessing LISA money within a year of opening it).

Alexland

Sorry I am a bit confused how can you still be in the first month since opening the HTB ISA when the product closed to new applications last year?

eskbanker

Alexland said:

Sorry I am a bit confused how can you still be in the first month since opening the HTB ISA when the product closed to new applications last year?

The £1,200 applies to the first month in which anything is paid in, not within a month of opening, so if OP managed to keep the account open up to this point without paying anything in then this is still valid:

https://www.nationwide.co.uk/support/support-articles/terms-and-conditions/help-to-buy-isa

In the first calendar month that you pay any money into this account, you will then have until the end of the same calendar month as that payment was made to pay in up to the maximum total amount of £1,200.

 https://www.helptobuy.gov.uk/documents/2015/12/scheme-rules.pdf/

6.1 Maximum First Month Amount and Monthly Allowance

(A) A Help to Buy: ISA Holder shall be entitled to pay in aggregate up to the Maximum First Month Amount into their Help to Buy: ISA in the first month in which they pay any amounts into their Help to Buy: ISA. 

masonic

Also, you should note that it's not a "2.5% nationwide help to buy ISA" for much longer. The rate drops to (IIRC) 1% at the end of this week.

Benshiolou12

Alexland said:

Sorry I am a bit confused how can you still be in the first month since opening the HTB ISA when the product closed to new applications last year?

I have not put any money previously so this is the first calendar month of me putting any money into it

Benshiolou12

masonic said:

Also, you should note that it's not a "2.5% nationwide help to buy ISA" for much longer. The rate drops to (IIRC) 1% at the end of this week.

Wow really? So it’s only going to be 1% permanently? Only really worth it for the governments 25% then but that’s max 3 grand... 

Benshiolou12

eskbanker said:

Benshiolou12 said:

Hi all, today I put my first 200 pound in my help to buy, and I have until the end of the month to transfer in a maximum of £1200. 

Just to be clear, now you've paid in £200, you can pay in a maximum of £1,000 more this month, i.e. £1,200 in total.

Benshiolou12 said:

Also would anyone know if it’s worth me getting a LISA once I turn a 18 as I am trying to save for my first house.

Up to you - I see it's a year since I pointed you to the MSE article about LISAs so worth refreshing yourself on that and its comparison with HTB ISA, bearing in mind that you can only use the government bonus from one or the other (not both) when buying your first property.  Apart from anything else, it'll be worth opening a LISA with a token quid just to start the clock ticking and keep your options open (you're charged a withdrawal penalty if accessing LISA money within a year of opening it).

Thank you mate 👍

masonic

Benshiolou12 said:

masonic said:

Also, you should note that it's not a "2.5% nationwide help to buy ISA" for much longer. The rate drops to (IIRC) 1% at the end of this week.

Wow really? So it’s only going to be 1% permanently? Only really worth it for the governments 25% then but that’s max 3 grand... 

For that reason, if you'll not be buying until at least age 19 (so can hold a LISA the 1 year minimum term) and are already drawn to using a LISA, it might not be worth bothering with a HTB ISA (though some transfer options to higher rate HTB ISAs still exist, the lockdown has made this process difficult). Provided you are committed to using the money towards your first home.

At the moment there is no net penalty for withdrawals from LISAs, but it's reasonable to assume this will be reintroduced in the future.

Alexland

Benshiolou12 said:

I have not put any money previously so this is the first calendar month of me putting any money into it

I am just surprised that Nationwide didn't require an initial deposit or close the account due to inactivity in the past 6 months especially as we are now in a new tax year.