Help to Buy ISA problem..I talked my daughter into taking a poisoned chalice

mickleton

My daughter has a "full" old help to buy ISA .At 26 she would love to buy a house..once she gets a permanent teaching job!She is saving but cannot start a LISA because she has an old Help to buy ISA...if she transfers £4000 into a LISA she will lose part of the £3000 government credit she has already earned.She is hoping to buy in less than 2 years so cannot get above that £3000 gain
Added to this property prices are rising rapidly in the area..she can no longer buy a 2 bedroom house for £250000,so the old Help to buy looks like it will have been worthless

I felt I was giving good advice to get a Help to Buy ISA but now I feel guilty that her elder sister was able to gain the government uplift,but that she has been left with something that is going to prove useless.I feel the government should at least raise the limit on the purchase value of the property..she has held this since being at uni..how much has the average property price gone up since then !!
HONESTLY NEED MARTIN LEWIS TO TAKE THIS ON THIS QUEST

eskbanker

It's pointless expecting Martin Lewis or anyone else to try to secure any changes to an old scheme, even though its well-published property value cap is no longer as useful as it once was.

She should get a LISA opened asap (tomorrow would be good) and get money shifted over from the HTB ISA - if she can get the first £4K into it by Tuesday, then she can get another £8K in by April next year, thereby not missing out.  No point in perceiving the £3K 'accrued' so far as lost if it couldn't be used anyway, so just concentrate on securing the best deal starting from now....

masonic

HTB ISAs had the best interest rates available in years past. They have been great savings accounts even for those who didn't use them for a house purchase. The Government bonus is only earned when you make a qualifying property transaction. The balance of her HTB ISA consists only of money that is hers to do whatever she wants with. Not a penny will be taken away if she decides to move it elsewhere.

If she cannot meet the HTB ISA scheme rules, but can do so for a LISA, then it would be a shame for her to miss out due to a misunderstanding.

grumiofoundation

Assuming not buying within 12 months as above get LISA open ASAP and she should be able to get 4k in before the end of this tax year (but ensure she checks the providers cut off time), 4k in next tax year and a further 4k in April 2023, meaning 12k (so same bonus as HTB ISA) by May 2023.

As above would be shame to lose out on misunderstanding - she can open, and contribute to LISA despite having HTB ISA.  

nomorekids

My daughter is in same boat she has done the LISA on her own and I did the HTB, I m just treating the HTB as her savings and forget about the 3K uplift for her for where she is looking to buy.

My other daughter has HTB and LISA too, she isn't ready yet to buy yet awhile but likely to where she currently rents, you can still get lovely 2 bed homes for less than £100000 there so ironically she is likely to use her HTB isa and not her LISA when she buys. 

eskbanker

nomorekids said:

My other daughter has HTB and LISA too, she isn't ready yet to buy yet awhile but likely to where she currently rents, you can still get lovely 2 bed homes for less than £100000 there so ironically she is likely to use her HTB isa and not her LISA when she buys. 

Obviously everyone's circumstances will vary, but by not using her LISA towards her first property, she's effectively locking that money away until she's 60, unless happy to pay the withdrawal penalty - that will work for some but not all....