Advice on Transferring Help to Buy ISA to a Lifetime ISA

eskbanker

grumiofoundation said:

TheDarkKnight93 said:

bowlhead99 said:

TheDarkKnight93 said:

grumiofoundation said:

Meant ‘now’ as in once you have 12k in LISA (forgot your quote) - so in April 2022.

Oh I see what you mean.

But doing that would basically mean all I am doing is a transferral of funds that is taking 3 years.

Wanted to know what other options I have as it seems nonsensical doing that.

It's not nonsensical because there is sense behind it, and you will be moving to a better product with greater possible total bonus and more flexibility on what sort of property to buy.

If you put in the first £4k to the LISA by 5 April 2021, then by the next day (6 April 2021, new tax year) you can have £8k in the LISA and by 6 April 2022 (less than 2 years from now) you can have £12k in the LISA. Importantly, on 6 April 2023 (less than 33 months from now) you can add another £4k to make £16k, and by 6 April 2024 you can make it £20k, and so on - no upper limit, you are allowed the bonus on anything you put in, as long as you don't go over the contribution limit per year. The more bonus the better, right?

Whereas if you stay with the HTB ISA the maximum amount you can have a bonus on is £12k, and you may not even be able to use the bonus if you don't buy a relatively cheap property (due to going over £250k limit).

So, if you'll definitely buy at some point, but are unlikely to be buying before 6 April 2022 (the date by which you can top the LISA up to £12k) it is not 'nonsensical' to gradually transfer the money over into the better product.

In the meantime, HTB ISAs pay pretty good interest rates so there's no need to take all your money out of that product right now, but you can feel free to gradually wind it down over time as you move money into the LISA. 

I guess. I can definitely see what you are saying, and that does make sense.

Just annoying it wasn't made aware by the actual HTB at the time of release of the LISA so I could of been moving it over then and got to the stage I am now, sooner.

What do you mean made aware?

The differences in the schemes were clearly laid out from the start. In fact when the LISA was first brought out you were able to transfer your whole HTB ISA (even if more than £4000) to LISA until a cut off point (can't remember when). 

Right from the very first version of MSE's LISA page in March 2016, it was clear that rolling HTB money into a LISA (above the annual £4K limit) would be possible only during the 2017/18 tax year as a one-off transitional arrangement, but I suspect that OP hoped they'd be advised of this by their HTB ISA provider, which seems optimistic!

bowlhead99

TheDarkKnight93 said:

grumiofoundation said:

What do you mean made aware?

The differences in the schemes were clearly laid out from the start. In fact when the LISA was first brought out you were able to transfer your whole HTB ISA (even if more than £4000) to LISA until a cut off point (can't remember when). 

See I wasn't aware of that.

It didn't seem like it was marketed to the mass audience that you could trasfer all of it, otherwise I would of done at the time.

The LISA managers that accepted transfers were vocal about it, because they wanted people who were not with them, to move money to them. All the money you'd put into your HTB ISA  by 5 April 2017, together with the full £4k for 2017/18, could be swept over into a LISA by 5 April 2018.  Loads of threads here were talking about it around the time you joined the forums, as did articles on the main MSE site and in the financial press, expressing the importance of doing it before the end of the first tax year for which LISAs were available (i.e. 5 April 2018).  Martin the MSE talked about it on his TV spots as well as in the national papers.

MoneyMan01

Don't get me wrong, it probably come across differently on the post, All I was saying is that I wasn't aware, as in, for whatever reason it wasn't something that made it's way known to me during that time.

Not saying it wasn't on here, just that it wasn't something I was personally aware of.

I know that year in particular I was going through some personal stuff so that would likely be the reason.

Just a shame I can't do anything about it now.

bowlhead99

TheDarkKnight93 said:

I know that year in particular I was going through some personal stuff so that would likely be the reason. 

Just a shame I can't do anything about it now. 

As they say, 
- the best time to act was two to three years ago... you could already have had up to £16k in a LISA with £4k of bonuses to date if you had paid £4k into it during 2017/18, £4k in 2018/19, £4k in 19/20 and up to £4k since 6 April this year.

- the second best time to act, is now.

In other words, without worrying about would-a, should-a, could-a', now you know that it's a reasonably sensible thing to do to start to switch over, you can just go ahead and starty do that, no big deal. As it happens the HTB ISAs are generally paying slightly better interest rates (because they can only increase their balances at quite a slow rate, so it is not too much of a giveaway for banks to give them an attractive interest rate), so it is not a major problem that you have been using the HTB:ISA, but there is a better opportunity out there for you (in terms of better total bonus and more flexibility of property) so would make sense to start to do something about it.

MoneyMan01

Yeah I guess. Definitely something I will need to weigh up and decide what I am going to do.

MoneyMan01

Given there are even more savings account interest rate cuts happening daily, the best available now is 0.57% with RCI.

Hardly seems worth it, given that is likely to have a rate reduction as well in the next few days, just like every other savings account has had.

What is everyone else doing now or could suggest? I really don't know what to do with the money left over after maxing the Premium Bonds account?

Alexland

TheDarkKnight93 said:

Given there are even more savings account interest rate cuts happening daily, the best available now is 0.57% with RCI.

Hardly seems worth it, given that is likely to have a rate reduction as well in the next few days, just like every other savings account has had.

What is everyone else doing now or could suggest? I really don't know what to do with the money left over after maxing the Premium Bonds account?

Did you open the LISA account in July with a token amount to get the clock started? (edit: looking at you post in another thread you did this with £1). If so could you add more into the account now while still getting a good rate on your old HTB ISA? Have you looked at some of the better regular saving rates still available?