Help to buy or Life Time advice please

Klare1

Daughter 24 lives at home, minimal outgoings and works in retail with various hours each week. so an irregular income. She's looking for work in the field she's got her degree in so her income stream will hopefully change but there is no guarantee.
Taking Martins advice a few years ago she opened a Help To Buy ISA (Nationwide)  but put £0 into it. 
She's had a letter to say unless she pays in they will close it on 9th October. We called into Nationwide yesterday and she does have the option to pay in the initial £1200 prior to 9th October.
Or would she be better ditching that and starting a Life Time ISA? I appreciate that Nationwide might not be the best place and understand we can move it if necessary.

She is not considering buying a property straight away but could potentially prior to the December 2030 deadline. Due to an inheritance/living at home etc she does have a decent deposit of around £50K

I also think that she should look at a private pension due to her irregular hours. Would she be wise to have a consultation with an IFA?

Not sure how best to advise her as me and her Dad's circumstances are very different (bought our first property in the 80's paid into old style occupational pension schemes with the same employer for 40 years etc so we have been very lucky).

If this was your daughter or your 24 year old self what would you advise?

(I watched MSE last night and got some good tips for her)

Thanks in advance for your help

Ch1ll1Phlakes

I would suggest at this stage that the Help to Buy ISA will only be useful for your daughter if she had limited funds to put away or needed access to the funds (though I would suggest funds saved for a house purchase should be left alone). Neither of these is true with the £50k inheritance, so Lifetime ISA is probably more suitable as follows.

The year limit on H2B funds is £2400 (i.e. £200 per month, though as you mention the first month is £1200) whereas the Lifetime ISA is £4000 per year. With the H2B deadline in December 2030, if you daughter moved the maximum each month into the H2B account she could have the maximum balance of £12000 by May 2030 (hopefully right as done very quickly). On the other hand that's six tax-years away, and if your daughter filled the Lifetime ISA each tax-year she could have £24000 saved by May 2030. That's double the H2B ISA and £30k with the bonus (plus more with interest). And note, the H2B ISA in this case would only give your daughter 6-7 months to complete a house purchase.

The main restriction that may not suit your daughter with the Lifetime ISA is the withdrawal penalty (which may change in the coming years) as her irregular hours and salary may mean budgeting is harder and more likely that any savings she has are dipped into to. Yes hopefully this is not the case as the inheritance funds should be plenty to dip into if she needed rather than her Lifetime ISA funds.

As she's on irregular hours and in a retail job currently, I doubt an IFA would be very helpful as she won't have a large enough pot of money for them to help with, and fees are probably gonna rule that option out. If she wants to set up a private pension she can do that herself, but as she's 24 her workplace should already have a pension that is being paid into. Though an additional private pension would not do any harm and she should be able to set this up herself or increase her contributions through her workplace pension.

I recently had a discussion with someone else in a similar situation on the forum and I will link that thread plus the links to the MSE pages on H2B and Lifetime ISA for you and your daughter to read as only then will you BOTH hopefully understand the drawbacks of each product ( mainly deposit limited and penalties). Everyone's situation is different and is up to yourselves to plan accordingly. Hope this helps, if you've any further questions just drop a further message here and myself or someone else should be able to help.

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