Is a Lifetime ISA the best place to save a house deposit?

Kysa85

Hello, 
I will be inheriting £5000 shortly and I would like to save £4000 and then add to it monthly to build up a deposit for a house to be used in the next couple of years. I have a help to buy ISA open ( nothing in it currently) but am I right in thinking that a Lifetime ISA will give me a better return and is a cash lifetime ISA the best place to put my money? I would also like to know if any of the Lifetime ISAs are better than the others, I have been considering either Skipton or Nottingham? Also, should I continue to pay into my pension or put that money towards the house deposit so I can get on the property ladder quicker? I am 34 if that's make any difference.

Thanks

george4064

You need to weigh up your options, I highlight this because you don’t want to for example contribute loads of money to your pension to the detriment of your goal to saving for a house, so you need to find a balance.

I would suggest having a thorough read through the MSE LISA page here: https://www.moneysavingexpert.com/savings/lifetime-isas/ This will provide with a comparison of the different types of LISAs (stocks & shares of cash LISA) as well as the different providers.

Also be wary of the £450k maximum purchase price, if the first property you buy exceeds £450k you won’t be able to use your LISA for it.

Edit: If you havent already, Id suggest having a read through the ISA sub-forum here (‘official’ LISA thread as well lots of other threads about LISAs and FTBs): https://forums.moneysavingexpert.com/categories/isas-tax-free-savings

eskbanker

If your HTB ISA is empty (are you sure it's still usable anyway?), then you'd be better going down the LISA route, as you can pay in your £4K in one go, and then up to another £4K from next April, significantly more than you could achieve with a HTB ISA, where you're constrained to £200 per month after £1,000 in the first month.

Most providers have been dropping interest rates so keep an eye on this site and others to monitor best rates.

It would typically be better to be paying into a pension while concurrently saving for a property, rather than choosing one or the other, but you'd need to consider your finances in the round rather than generalisations that may or may not apply to your own circumstances.