Should I bother with my Help to Buy ISA or would other investments make sense?

icarus_69

My situation: 28 years old, still living at home, no savings, money is tight, but work (a relatively even split between employed and freelance work in different areas) is slowly building up. My aim for the next six months is to have enough work that brings in around 30k before tax - a combination of work as an employee at companies and my self-employed work.

I signed up to the Help to Buy ISA a couple of years ago before they closed it off https://www.halifax.co.uk/isas/cash-isas/help-to-buy-isa.html and wonder if I should start making regular investments into it or should look elsewhere.

I can't even contemplate buying my first home anytime soon. And I am pessimistic about being able to do so by 2030 - which is the deadline to claim the bonus from the government when buying your first home.

I'm reviewing this (and looking at my savings plan in general) now because the freelance work is picking up, and I feel I need to start saving, both for a home and for my retirement. I'll of course have some pensions from my work as an employee and the state pension, but I feel I need to have personal savings and/or private pensions too. And of course, I would like to not live at home forever. I am probably going to start renting soon (once I'm out my overdraft) and understand that's just burning money, but for the sake of my mental health know that living out on my own as soon as possible will be beneficial.

How much I should be saving per month aside, I really just want to figure out which savings methods (e.g. private pensions, LISAs, etc) and importantly which combination of methods I should consider, for my dual goals of a) being able to buy a home within the next 10-15 years and b) having a decent retirement.

Any advice welcome. I will not take any decisions based solely on advice given here and will seek financial advice from an expert, so please feel free to speak your mind rather than hesitating.

eskbanker

If you haven't been making much use of a Help to Buy ISA and aren't planning to buy for many years, then it'll make more sense to use the LISA alternative, for use towards the property purchase goal.  The annual contribution limit is £4K but the broader issue of how to balance short/medium and long term saving needs will be dependent not just on disposable income right now but over the next few years too.

Exodi

eskbanker said:

If you haven't been making much use of a Help to Buy ISA and aren't planning to buy for many years, then it'll make more sense to use the LISA alternative, for use towards the property purchase goal.  The annual contribution limit is £4K but the broader issue of how to balance short/medium and long term saving needs will be dependent not just on disposable income right now but over the next few years too.

Second the LISA.

The HTB ISA property value limit was never updated so can be relatively small depending on where you live - it sits at £250,000 (or £450,000 in London). People that live in the SE may prefer to not take up the bonus to buy a house that they can see themselves living in for a while, rather than compromise on a flat/2 bed terrace in Not-In-A-Million-Years Lane, just to take advantage of the bonus.

Alternatively, a LISA has a property value limit of £450,000 even outside of London.

badger09

Another vote for LISA. If you’re not likely to buy within the next 10 - 15 years, S&S LISA would make more sense. Pay in up to £4k each tax year and government adds £1k. 

However I also think you should build up an emergency fund in a high rate instant access account or Regular Saver. When you’re in your own place there will often be expenditure you hadn’t thought of.