Can I transfer my Help To Buy ISA into a 'normal' fixed cash ISA?

TiaTiaTia

Hello,

I have a Help to Buy cash ISA with NatWest currently however it will be of no benefit to me as I have already bought a property that fell outside of the requirements for obtaining the bonus. I kept the Help to Buy ISA as the interest on there was better than my savings account but I am planning on opening a fixed cash ISA soon (Barclays, 1 year fixed at 4%) and I wanted to know if I could transfer in my Help to Buy ISA as well as add my annual allowance to the new ISA (£20K - £2400 I've already paid into the Help to Buy ISA this year).

When I try to Google this, all that comes up is that I can transfer Help to Buy to Help to Buy or to a LISA. 

Thank you in advance.

eskbanker

Ultimately HTB is just a specialist cash ISA, so if the new one accepts transfers then it should be possible to transfer in your HTB.  You can also pay in your residual 2022/23 allowance, but should check your maths as you can't have paid £2400 into a HTB ISA during this tax year yet!

TiaTiaTia

Thank you!

Yes, sorry, I was just pre-empting having paid in £2400 by March, however if I open it sooner, it may be around £2000 or £2200. 

But that is great to know as that is an added bonus of change I can move into a 4% interest account!

daaave

I’m in a very similar situation. Got ~12k in a h2b isa and the interest rates are terrible. I assumed I couldn’t transfer out to a normal isa as id used up the 20k limit.

I guess it’s worth trying and seeing what happens.

has anyone actually done it?

This problem would be solved if the banks were competitive with their h2b isas. They should be. The cash is very “sticky” and it just sits on their balance sheet earning them money - they’re taking the Micky, imo.

Maybe emailing our MPs is the way forward?

eskbanker

daaave said:

I’m in a very similar situation. Got ~12k in a h2b isa and the interest rates are terrible. I assumed I couldn’t transfer out to a normal isa as id used up the 20k limit.

The £20K annual contribution limit doesn't affect ISA transfers.

daaave said:

This problem would be solved if the banks were competitive with their h2b isas. They should be. The cash is very “sticky” and it just sits on their balance sheet earning them money - they’re taking the Micky, imo.

Maybe emailing our MPs is the way forward?

I'd like to think that parliamentarians have more important matters to concentrate on than trying to intervene in commercial rate setting decisions for niche products....

Aidanmc

daaave said:

I’m in a very similar situation. Got ~12k in a h2b isa and the interest rates are terrible. I assumed I couldn’t transfer out to a normal isa as id used up the 20k limit.

I guess it’s worth trying and seeing what happens.

has anyone actually done it?

This problem would be solved if the banks were competitive with their h2b isas. They should be. The cash is very “sticky” and it just sits on their balance sheet earning them money - they’re taking the Micky, imo.

Maybe emailing our MPs is the way forward?

I transferred a HSBC H2B Isa to Virgin cash Isa last year, no problem.

daaave

eskbanker said:

daaave said:

I’m in a very similar situation. Got ~12k in a h2b isa and the interest rates are terrible. I assumed I couldn’t transfer out to a normal isa as id used up the 20k limit.

The £20K annual contribution limit doesn't affect ISA transfers.

daaave said:

This problem would be solved if the banks were competitive with their h2b isas. They should be. The cash is very “sticky” and it just sits on their balance sheet earning them money - they’re taking the Micky, imo.

Maybe emailing our MPs is the way forward?

I'd like to think that parliamentarians have more important matters to concentrate on than trying to intervene in commercial rate setting decisions for niche products...

I think it is kinda relevant - the h2b isa was a manifesto promise from the tories in 2015. 

Thanks for your info on transfers. Really helpful. It’s not mentioned on any government website or in any of the banks h2b isa t&c’s - that you can transfer out a h2b isa into a normal cash isa and not use up the current years isa allowance. You might be right, though.

I’m probably going to give it a go if h2b isa rates don’t improve in the next few weeks.

eskbanker

daaave said:

eskbanker said:

daaave said:

This problem would be solved if the banks were competitive with their h2b isas. They should be. The cash is very “sticky” and it just sits on their balance sheet earning them money - they’re taking the Micky, imo.

Maybe emailing our MPs is the way forward?

I'd like to think that parliamentarians have more important matters to concentrate on than trying to intervene in commercial rate setting decisions for niche products...

I think it is kinda relevant - the h2b isa was a manifesto promise from the tories in 2015.

It was announced in the March 2015 budget, two months before that year's general election, but the subsequent launch of the Lifetime ISA in 2017 effectively superseded it as the preferred product, so it's even less likely now than then that there'd be any appetite for radical changes to the older product, as covered in recent threads about the property value limits.

However, the fact that the product is defined in legislation doesn't imply that the government should intervene in rate setting!

daaave said:

eskbanker said:

daaave said:

I’m in a very similar situation. Got ~12k in a h2b isa and the interest rates are terrible. I assumed I couldn’t transfer out to a normal isa as id used up the 20k limit.

The £20K annual contribution limit doesn't affect ISA transfers.

Thanks for your info on transfers. Really helpful. It’s not mentioned on any government website or in any of the banks h2b isa t&c’s - that you can transfer out a h2b isa into a normal cash isa and not use up the current years isa allowance. You might be right, though.

A transfer from a HTB ISA to any other type of ISA is covered by the generic rules, rather than anything being defined specifically for HTB, so https://www.gov.uk/guidance/transfer-an-isa-if-youre-an-isa-manager clarifies:

Investments and/or cash transferred are not new subscriptions for the purposes of the overall subscription limit. However, investments and/or cash transferred into a Lifetime ISA may receive a government bonus and may count to the Lifetime ISA payment limit.