Martin Lewis: Should I move my Help to Buy ISA into a Lifetime ISA?

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  • JoeGuerin2JoeGuerin2 Forumite
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    Is the 25% annual bonus for the LISA split across the 12 months each year? Or is it 25% of whatever value you have in at the end of the Tax Year?

    A number of providers pay in the bonus shortly after you add any money.
    So pay in £1000 in May, and you'll possibly receive your bonus on that payment (£250) in June, pay in £2000 in August, receive £500 in September, etc.
    Best to check with your inidividual provider as to when they pay.
    Thanks, any reccomandation for who to go with? I have £4000 ready to open the account with.
  • Walker1Walker1 Forumite
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    Is the 25% annual bonus for the LISA split across the 12 months each year? Or is it 25% of whatever value you have in at the end of the Tax Year?

    A number of providers pay in the bonus shortly after you add any money.
    So pay in £1000 in May, and you'll possibly receive your bonus on that payment (£250) in June, pay in £2000 in August, receive £500 in September, etc.
    Best to check with your inidividual provider as to when they pay.
    Thanks, any reccomandation for who to go with? I have £4000 ready to open the account with.
    I’m with Skipton, no idea if that’s a good choice or not, but whoever you use get it done quick or your gonna miss out on £1000.

    I know Skipton’s cut off date for deposits is before in a day or 2.
  • alstoreyalstorey Forumite
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    Myself and my partner currently have a help to buy isa, my problem is i am originally from Ireland so there is a possibility of moving back and buying there.. Also, if we do decide to buy in the UK, the house will probably be 300K+. So the help to buy now doesnt help due to the 250K limit and the LISA has the 6% withdrawal fee if we decided not to buy in the UK and take the money out. If we do decided to buy a 300K house with the help to buy, i assume we will not be eligble for the topup as we would not be eligble due to the house value?

  • edited 28 April 2021 at 2:45AM
    Wings_of_AmbitionWings_of_Ambition Forumite
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    edited 28 April 2021 at 2:45AM
    Correct.  The maximum allowed house price when using the HTB ISA is £250k.

    Perhaps you could open a LISA now, fund it with just £1, and if you subsequently decide to purchase within the UK, then max it out with as much as you can up to £4k per tax year.  So, as an example, if you decide early next year that you're going to make a UK purchase next Summer, you could get £4000 in before 5th April 2022, and another £4000 in after 6th April 2022..... giving you £2000 in bonuses.  Or at least £1000 if the dates don't straddle 2 tax years.  You'll get some bonus as long as the LISA has been open 1 year by the purchase date. You may even be able to TRANSFER your HTB ISA balance (in £4k per year chunks) if you do this, instead of using new cash.
  • pKaTzpKaTz Forumite
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    Hi.
    My wife has both a LISA and H2B ISA as she was turning 40. She will be 43 in January and I will be 46.
    She hasn't bought a house before, where as I was jointly on a mortgage with my father. [Now been mortgage clear for about 10 years, But I am still down as a homeowner.

    As she will be a first time buyer, would we be able to get a joint mortgage to buy a house? Will be well below the £250k limit.
    Planning to use the H2B and keep the LISA for pension. Both have been maxed out every year.

    Many thanks in advance.
  • edited 15 May at 9:06AM
    jouefjouef Forumite
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    edited 15 May at 9:06AM
    ... if you don't use the LISA for a house purchase and end up withdrawing it, you will lose more than you put in, as MSE's article on LISAs explains.
    ... if she intends to keep the LISA until age 60.  Withdrawing the cash before that would incur penalties greater than the amount put in.
    This is not correct. (1) You would lose around 6% of what you put in, not lose 'more than you put in'. (2) You would incur penalties of about 6% of the amount put in, not incur penalties 'greater than the amount put in'.
    In both cases, it is the amount you put in which is more than/greater than the amount you withdraw. The loss or the penalty is not more than/greater than the amount you put in.
  • JasminnaJasminna Forumite
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    Newbie
    I'm in a situation not covered by Martin's blog post and I was wondering if anyone has thoughts on this or a similar experience?

    Me and my partner both opened Help to Buy ISAs a few years ago when we started thinking about buying a house together and as we've paid the max monthly contribution, we've each saved ~£7k and are finally buying our first property. However, it just exceeds the £450k (London) limit for using the ISAs. We don't need them for our deposit, he's now over 40 so can't transfer his into a LISA. I can only transfer £4k of mine into a LISA and only have 11 years to keep paying into that anyway. As Martin says that paying into a pension is actually more beneficial than a LISA, should we both just pay our £7k each into our pensions and just feel sad we basically didn't just pay into a pension to begin with? The ISAs weren't completely pointless in terms of interest rate but they more or less were.
  • Ivrytwr3Ivrytwr3 Forumite
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    Hi, after some help for a LISA newbie please!

    My son turns 18 next month and will come into some cash, he will able be off to Uni for the next 3 years. 

    We would like to put £4k immediately into a stocks and shares LISA and £4k in year 2as he won't need the cash for sometime.

    Can anyone advise the best provider for this please? 
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