Moving my Help to Buy into a LISA.

btoomes

I currently have just over £7k in a Help to Buy ISA (with other savings in a regular savings account). I'm considering moving over to a Lifetime ISA to increase my contributions. I can definitely hold off on buying within the next 12 months, so no concerns about needing the money before then. I live in the North of England so am highly unlikely to purchase my first home for more than the £450k allowance. The following is my plan:

1. Create LISA and put £4k in, transferred from my HTB before the end of March after my monthly contribution has gone in
2. When the new tax year comes on 6th April 2024, move another £4k in
3. Continue to save for the next 12 months in a separate account
4. 6th April 2025, put another £4k in

I've done some working out, and if I was to continue to save my £200/month into my Help to Buy until April 2025, I'd only have just over £10k saved. Whereas with a LISA, by April 2025 I will have £12k, therefore a bigger bonus and more likely at a better interest rate. 

I know a HTB ISA offers more flexibility, but it seems my personal circumstances tick the correct boxes to move over to the LISA to maximise the government bonus. If the plan above checks out in terms of timings between tax years, this is what I'd like to do. 

I just wanted to check with others - does this plan check out? Is there anything I'm missing? 

Thanks in advance. 

eskbanker

btoomes said:

I can definitely hold off on buying within the next 12 months

You'd need to be deferring your purchase until at least June 2025 to benefit from the full £12K plus all bonuses from a LISA, but if that timescale fits then your plan seems sensible to me, assuming you're under 40....

btoomes

eskbanker said:

btoomes said:

I can definitely hold off on buying within the next 12 months

You'd need to be deferring your purchase until at least June 2025 to benefit from the full £12K plus all bonuses from a LISA, but if that timescale fits then your plan seems sensible to me, assuming you're under 40....

Thanks - can I ask why? I thought if the LISA was open for 12 months, you were eligible for the full bonus? Yes, 27 here so no problems on the age. 

eskbanker

btoomes said:

eskbanker said:

btoomes said:

I can definitely hold off on buying within the next 12 months

You'd need to be deferring your purchase until at least June 2025 to benefit from the full £12K plus all bonuses from a LISA, but if that timescale fits then your plan seems sensible to me, assuming you're under 40....

Thanks - can I ask why? I thought if the LISA was open for 12 months, you were eligible for the full bonus? Yes, 27 here so no problems on the age. 

You can access the LISA, including all bonuses accrued, without penalty for a first time property purchase from 12 months after opening.

However, in your particular circumstances, you can only pay in the third £4K contribution from 6 April 2025, and the bonus on that won't be added to the account until late May....

btoomes

eskbanker said:

btoomes said:

eskbanker said:

btoomes said:

I can definitely hold off on buying within the next 12 months

You'd need to be deferring your purchase until at least June 2025 to benefit from the full £12K plus all bonuses from a LISA, but if that timescale fits then your plan seems sensible to me, assuming you're under 40....

Thanks - can I ask why? I thought if the LISA was open for 12 months, you were eligible for the full bonus? Yes, 27 here so no problems on the age. 

You can access the LISA, including all bonuses accrued, without penalty for a first time property purchase from 12 months after opening.

However, in your particular circumstances, you can only pay in the third £4K contribution from 6 April 2025, and the bonus on that won't be added to the account until late May....

Ah I see, makes sense. I was under the impression the bonus was paid on purchasing a property, not that it went into the account on a monthly basis. Thanks for your help 

eskbanker

btoomes said:

eskbanker said:

btoomes said:

eskbanker said:

btoomes said:

I can definitely hold off on buying within the next 12 months

You'd need to be deferring your purchase until at least June 2025 to benefit from the full £12K plus all bonuses from a LISA, but if that timescale fits then your plan seems sensible to me, assuming you're under 40....

Thanks - can I ask why? I thought if the LISA was open for 12 months, you were eligible for the full bonus? Yes, 27 here so no problems on the age. 

You can access the LISA, including all bonuses accrued, without penalty for a first time property purchase from 12 months after opening.

However, in your particular circumstances, you can only pay in the third £4K contribution from 6 April 2025, and the bonus on that won't be added to the account until late May....

Ah I see, makes sense. I was under the impression the bonus was paid on purchasing a property, not that it went into the account on a monthly basis. Thanks for your help 

Unlike HTB (which is a one-off bonus at purchase time), LISA bonus payments are based on a monthly cycle but are just paid once per contribution - if you pay in £4K between 6 April and 5 May, the resultant bonus should be paid within 28 days of the end of that claim period.