We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

Help to Buy ISA & LISA - what is my best option for my situation?

Options
87mave
87mave Posts: 38 Forumite
First Post First Anniversary Combo Breaker
edited 5 December 2022 at 7:24PM in ISAs & tax-free savings

Hi there, just a bit of help needed here as I'm not the most fluent when it comes to these things.

I opened up a Halifax Help to Buy ISA back in August 2016 and just put the odd few hundred quid in there now and again but had transferred everything out when I had money problems. I last put some money in it in March 2022 but I withdrew it instantly as I wanted to put it into a LISA with Moneybox as I heard good things. I opened and put £3800 into the Moneybox LISA in March and then maxed out the next month (new tax year) at £4000.

Now I'm in a position to buy a home at a really good price that's in motion now, but the thing is, because I opened up the Moneyboy LISA in March this year, I'm not eligable for the 25% gov bonus as you need to have it open at least a year. Halifax have a thing where you can transfer the whole value from one HTB account to theirs, but not from a LISA.

I have a few grand I was keeping spare but if I was to put that into the Halifax HTB as a lump sum for this year, could that be used towards the HTB as the main source and I get the 25% gov bonus? But also, could the remaining £7800 in the LISA be used for the purchase in sale (without the 25% gov bonus and minus any penalties) towards the deposit?

Hope this makes sense. I know I've made a mess of this but I'm honestly so crap at understanding these things and just wish I kept the Halifax HTB ISA as this has just confused it all. I just want to make the correct choice for my situation.

Thanks!

Comments

  • eskbanker
    eskbanker Posts: 31,861 Forumite
    First Anniversary Name Dropper Photogenic First Post
    edited 5 December 2022 at 7:38PM
    Options
    87mave said:

    I have a few grand I was keeping spare but if I was to put that into the Halifax HTB as a lump sum for this year, could that be used towards the HTB as the main source and I get the 25% gov bonus?

    Not an option, there is no facility to pay more than £200 into a HTB ISA in any month (except when originally opening it).

    87mave said:

    But also, could the remaining £7800 in the LISA be used for the purchase in sale (without the 25% gov bonus and minus any penalties) towards the deposit?

    If you paid £7,800 into a LISA earlier in the year, it should have been boosted to £9,750 with the bonus - you can withdraw it before the year but, as you say, you'd incur the penalty, which would reduce it to £7,312.50 plus any interest earned.
  • 87mave
    87mave Posts: 38 Forumite
    First Post First Anniversary Combo Breaker
    Options
    Not an option, there is no facility to pay more than £200 into a HTB ISA in any month (except when originally opening it).

    Thanks, I remember this now.

    If you paid £7,800 into a LISA earlier in the year, it should have been boosted to £9,750 with the bonus - you can withdraw it before the year but, as you say, you'd incur the penalty, which would reduce it to £7,312.50 plus any interest earned.

    Yes, I have the bonus, so if I it was used towards the house purchase now it would have the penalty charges incurred? Or just if I withdrew the money?
  • eskbanker
    eskbanker Posts: 31,861 Forumite
    First Anniversary Name Dropper Photogenic First Post
    Options
    87mave said:
    f you paid £7,800 into a LISA earlier in the year, it should have been boosted to £9,750 with the bonus - you can withdraw it before the year but, as you say, you'd incur the penalty, which would reduce it to £7,312.50 plus any interest earned.

    Yes, I have the bonus, so if I it was used towards the house purchase now it would have the penalty charges incurred? Or just if I withdrew the money?
    Either, it doesn't make any difference - you can only avoid the penalty if you use it (a) for a first time property purchase* and (b)  at least a year after opening, so if you breach either of those conditions then the penalty is applied. 

    * ignoring the unpenalised access once you're 60
Meet your Ambassadors

Categories

  • All Categories
  • 12 Election 2024: The MSE Leaders' Debate
  • 344.2K Banking & Borrowing
  • 250.4K Reduce Debt & Boost Income
  • 450.1K Spending & Discounts
  • 236.3K Work, Benefits & Business
  • 609.7K Mortgages, Homes & Bills
  • 173.6K Life & Family
  • 248.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards