Help to buy Isa and Cash Isa's 20 February at 4:17PM in Savings & investments 1 reply 78 views

jaffy60

When you reach the maximum required in the now closed Help to Buy Isa's (£12,000) can you stop saving in there but keep it open until you need the money and want to claim the £3,000 government bonus? My son has continued paying in the £200 per month although now has more than the £12,000 invested in it.

With interest rates being poor for so long he just left things as they were (he had money in Premium Bonds and did quite well) but now he's moving money around to maximise his savings.

He's now invested a maximum amount in a Fixed Rate account to get just under the £1,000 interest allowed and with the remainder of his savings he's literally just opened up another Fixed Rate Cash ISA thinking he won't pay tax on the interest but I've just read you can't have a Help to buy ISA and a cash ISA - is this correct? If so how will he rectify this as he doesn't want to fall foul of the regulations.
Thank you for any guidance.

eskbanker

jaffy60 said:

When you reach the maximum required in the now closed Help to Buy Isa's (£12,000) can you stop saving in there but keep it open until you need the money and want to claim the £3,000 government bonus?

Yes, £12K isn't a maximum as such, it's just the minimum balance required to achieve the maximum bonus, but there's no obligation to keep funding the account.

jaffy60 said:
I've just read you can't have a Help to buy ISA and a cash ISA - is this correct?

Not quite - you can have a HTB ISA and other cash ISAs but can only pay into one in any tax year.

jaffy60 said:

If so how will he rectify this as he doesn't want to fall foul of the regulations.

If he's paid into a HTB ISA and another cash ISA this tax year then the second one to be funded is likely to be deemed invalid by HMRC, but not for a while.  Best bet will probably be to transfer the non-HTB cash ISA to a S&S ISA, leaving the money uninvested for now (some pay 3% on cash), and then transfer it back to a cash ISA in six weeks time....