Help to Buy ISA, do I need to keep paying in? 8 June 2021 at 12:21PM in ISAs & tax-free savings 5 replies 105 views

toolazyto

I've been paying £200 a month into a Help to Buy ISA for enough years that I've reached the maximum 25% £3000 government contribution.

WIth the current interest rate of 0.05% since April 2021 I've not seen any point of continuing to save into this account. Is this a mistake? I'm not closing the account but I'm not paying into it either. Do I need to keep paying into this Help to Buy ISA until the day I buy a home?

I'd like to open a new normal cash ISA this year at a different bank but I'm worried if I'm at risk of losing the Help to Buy ISA benefit between now and November 2030 (cut off date for Help to buy claims).

eskbanker

There's certainly no obligation to fund these accounts on an ongoing basis as far as the scheme rules are concerned - individual providers then set their own Ts & Cs over and above these but I've never heard of any such requirement being specified....

If you're unlikely to be buying for quite a while (as implied by your apparent concern about the end date), have you considered using a Lifetime ISA instead?  It would take a couple of years (three tax years) to shift your HTB money into one but thereafter you could continue to earn 25% government bonus on larger amounts.

toolazyto

eskbanker said:

There's certainly no obligation to fund these accounts on an ongoing basis as far as the scheme rules are concerned - individual providers then set their own Ts & Cs over and above these but I've never heard of any such requirement being specified....

If you're unlikely to be buying for quite a while (as implied by your apparent concern about the end date), have you considered using a Lifetime ISA instead?  It would take a couple of years (three tax years) to shift your HTB money into one but thereafter you could continue to earn 25% government bonus on larger amounts.

Thanks for replying. I hadn't considered a transfer to a Lifetime ISA but I do intend to buy within the next 3 years all being well. 

masonic

Makes sense to stop paying into your HTB ISA, but will you get sufficient benefit from a normal cash ISA to favour it over a standard savings account? If there would be no tax to pay on the interest anyway, you may find you can get a better rate in a non-ISA account.

kuratowski

If you are outside London, then a Lifetime ISA has a higher property price limit than HTB ISA, something which is also worth considering.

https://blog.moneysavingexpert.com/2021/03/martin-lewis--should-i-move-my-help-to-buy-isa-into-a-lifetime-i

toolazyto

masonic said:

Makes sense to stop paying into your HTB ISA, but will you get sufficient benefit from a normal cash ISA to favour it over a standard savings account? If there would be no tax to pay on the interest anyway, you may find you can get a better rate in a non-ISA account.

Good point rates are poor at the moment.

kuratowski said:

If you are outside London, then a Lifetime ISA has a higher property price limit than HTB ISA, something which is also worth considering. 

Thanks I'll look into it.