Tranfering to Lifetime ISA from Help to Buy- Is it worth it?

grumble_100

My son has managed to save £8300 so far in his Help to Buy Isa and doesnt intend buying a home for at least another 2 years. He wants to save more than the £200 a month limit and understands that he can save 4k a year with a lifetime Isa. However, is it worth transferring. I understand you can only get teh bonus on one of them. He cannot transfer all £8300 into the Lifetime Isa and it will take him until 2022 to transfer it all over. so, in effect, he would not be able to save the xtra each month. Ok, he could save the extra in a lifetime ISA but then would not get the 25% on the 8k he has already saved. I can't work it out? Is ist worth him bothering?

grumiofoundation

He will be able to have paid £8000 into lifetime ISA by April 2021. 

In 2 years time he will have been able to pay in £12000 into lifetime ISA (since £4000 limit is tax year not calendar year).

This is as good as max. bonus from HTB but in event purchase takes longer he will be able to get >£3000 bonus. Lifetime ISA also can be used on property 450,000 or less whereas HTB is 250,000 (outside London). 

Edit - with obvious caveat that LISA, unlike HTB, is less flexible (not accessible without penalty) so if this is important and 250k limit is not relevant may be better sticking with HTB ISA.

https://www.moneysavingexpert.com/savings/lifetime-isas/

grumble_100

grumiofoundation said:

In 2 years time he will have been able to pay in £12000 into lifetime ISA (since £4000 limit is tax year not calendar year).

Thanks, so just to confirm, he will be able to make it up to £4000 up to 5th April 2021, £8000 from then to 5th April 2022 and £12000 from 6th April 2022. Is that right?

bowlhead99

grumble_100 said:

grumiofoundation said:

In 2 years time he will have been able to pay in £12000 into lifetime ISA (since £4000 limit is tax year not calendar year).

Thanks, so just to confirm, he will be able to make it up to £4000 up to 5th April 2021, £8000 from then to 5th April 2022 and £12000 from 6th April 2022. Is that right?

Yes, he could open the account with £4000 today if he wants, but otherwise contribute in dribs and drabs until he has maxed it out with £4000 of contributions by end of 5 Apr 2021, and a second £4000 between 6 Apr 21 to 5 Apr 22, and another £4000 at any point between 6 Apr 22 and 5 Apr 23 etc etc