H2B ISA Query

SKIPPY

Help please 

Son has a Help to Buy ISA ready for when he purchases his first house.  He now has approx £14,000 in it.  As the maxiumum bonus the government make is £3,000 I don't think it is worth paying anything else into it.  Am I right?  

My question is can he open a Cash ISA in the next tax year and begin paying into that as the interest rate would be better?  I know you can't pay into both in the same tax year but if he opens it in the next tax year and just leaves the HTB ISA to increase with the little bit of interest it pays?

Many Thanks

eskbanker

Yes, he can stop paying into the HTB ISA and start paying into another cash ISA once the new tax year starts.

Has he considered using a Lifetime ISA instead (and transferring the HTB contents over in £4K chunks), which would probably be a better idea unless he's likely to be buying within the next couple of years?

SKIPPY

Thank you - hopefully will purchase something within the next year if the right place is found.  It is something to think about - I have suggested he opens a Lifetime ISA and just puts the £1 in it so the clock starts ticking on the 12 month timescale.