Saving for a deposit: Help to Buy ISA or Lifetime ISA?

Gharial98

I currently have one of each accounts open. I would like advice on which option would be best for saving for a house deposit. My H2B currently has ~£1,200 and I am transferring in the maximum £200 per month. My LISA has only ~£300.

I was considering transferring the H2B funds into the LISA as that can give me a yearly 25% bonus, though the LISA is an investment account so it seems risky. I can't withdraw from the LISA unless it's for a deposit or once I'm 60. I believe I can withdraw from the H2B at any time. 

Should I continue with the £200/month H2B, using the LISA as a long-term investment account? 

Albermarle

though the LISA is an investment account so it seems risky. 

If you are using a LISA to save for retirement than a Stocks and shares LISA is better, as the long time scale favours investing/ vastly reduces risk.

If you are using a LISA for a house deposit you should be in a Cash Lisa , not an investment one.

BobT36

H2Buy ISA is capped at £250k outside of London for house purchases. It doesn't buy much nowdays. 
All my attempts at raising this with the govt department have seen it brushed off as "average house sales since it started was blabla". Yeah, that doesn't help current day does it... 

Problem with the LISA is it takes time to move your money in (can only transfer so much per tax year) which doesn't help anyone imminently wanting to buy a home. Also your money is essentially locked in (unless want to suffer penalty) so have to be sure you don't need it in the short term. 

Really annoyed the H2Buy cap hasn't risen with house prices. Rendered the account pointless. May as well have just dumped the money elsewhere with better rates. 

Gharial98

Albermarle said:

though the LISA is an investment account so it seems risky. 

If you are using a LISA to save for retirement than a Stocks and shares LISA is better, as the long time scale favours investing/ vastly reduces risk.

If you are using a LISA for a house deposit you should be in a Cash Lisa , not an investment one.

Thanks for the reply. I believe my LISA is an investment LISA (LISA for First Home with Hargreaves & Lansdown)

BobT36 said:

H2Buy ISA is capped at £250k outside of London for house purchases. It doesn't buy much nowdays. 
All my attempts at raising this with the govt department have seen it brushed off as "average house sales since it started was blabla". Yeah, that doesn't help current day does it... 

Problem with the LISA is it takes time to move your money in (can only transfer so much per tax year) which doesn't help anyone imminently wanting to buy a home. Also your money is essentially locked in (unless want to suffer penalty) so have to be sure you don't need it in the short term. 

Really annoyed the H2Buy cap hasn't risen with house prices. Rendered the account pointless. May as well have just dumped the money elsewhere with better rates. 

Thanks. The Investment LISA allows up to £450k property value though considering the above comment, it seems opening a cash LISA in the next tax year and transferring the H2B into this is the way to go about it (I currently have <£4k in the H2B so it would be within the yearly allowance).