Help to buy ISA transfer

Mike970

If you have a HTB ISA which already has the maximum £12k eligible for the 25% bonus and you transfer it to a Lifetime ISA, do you lose the £3k from the 25% bonus that the account would have accrued? eg, if you transfer to a LISA, would you effectively be starting afresh?

masonic

Mike970 said:

If you have a HTB ISA which already has the maximum £12k eligible for the 25% bonus and you transfer it to a Lifetime ISA, do you lose the £3k from the 25% bonus that the account would have accrued? eg, if you transfer to a LISA, would you effectively be starting afresh?

You can only add a maximum of £4k per tax year to a LISA (each £4k added will receive £1k bonus), including any transfers from other types of ISA. You can only claim the HTB ISA bonus on the closing balance of the HTB ISA and you cannot use it if you are using the LISA.

Alexland

Also worth noting the following was announced in the budget:

"Lifetime ISA Reform – The government will publish a consultation in early 2026 on the implementation of a new, simpler ISA product to support first time buyers to buy a home. Once available, this new product will be offered in place of the Lifetime ISA."

They failed to mention if there would be a migration path for existing LISA savers which is incredibly unhelpful for those looking to start or already saving towards qualifying property purchase using a LISA where the purchase date is likely still some way away.

It's hard enough for most people to save a deposit without the government making the landscape uncertain.

eskbanker

Alexland said:

Also worth noting the following was announced in the budget:

"Lifetime ISA Reform – The government will publish a consultation in early 2026 on the implementation of a new, simpler ISA product to support first time buyers to buy a home. Once available, this new product will be offered in place of the Lifetime ISA."

They failed to mention if there would be a migration path for existing LISA savers which is incredibly unhelpful for those looking to start or already saving towards qualifying property purchase using a LISA where the purchase date is likely still some way away.

It's hard enough for most people to save a deposit without the government making the landscape uncertain.

As you say, no commitment to a migration path, but there was one last time round, affording HTB ISA holders a window within which to transfer into LISA in an advantageous way - that's not necessarily to say that this is a binding precedent but these are long term schemes and they'll be well aware of how unpopular it would be to leave people stranded.

Seems to me that there's an element of being damned if they do and damned if they don't, when announcing direction of travel without having finessed the detail with stakeholders, which should be a consultative process.

Alexland

eskbanker said:
they'll be well aware of how unpopular it would be to leave people stranded.

Amazingly being incredibly unpopular no longer seems to be a barrier in the decision making.

Seems to me that there's an element of being damned if they do and damned if they don't, when announcing direction of travel without having finessed the detail with stakeholders, which should be a consultative process.

At this stage they could have just said there would be a transition path to ensure that LISA users were not disadvantaged, it's not unreasonable and completely within their powers, and left the detail to the consultation.

eskbanker

Alexland said:

eskbanker said:
they'll be well aware of how unpopular it would be to leave people stranded.

Amazingly being incredibly unpopular no longer seems to be a barrier in the decision making.

Perhaps popular wasn't the best choice of words - populist governments are rarely successful!

Alexland said:

Seems to me that there's an element of being damned if they do and damned if they don't, when announcing direction of travel without having finessed the detail with stakeholders, which should be a consultative process.

At this stage they could have just said there would be a transition path to ensure that LISA users were not disadvantaged, it's not unreasonable and completely within their powers, and left the detail to the consultation.

I think there's a limit to how far they could have gone without prejudicing the consultation - guaranteeing no disadvantage would be too far IMHO, but conversely any lesser and more generic statement about intending a transitional arrangement naturally wouldn't resolve the uncertainty.

Alexland

eskbanker said:

I think there's a limit to how far they could have gone without prejudicing the consultation - guaranteeing no disadvantage would be too far IMHO, but conversely any lesser and more generic statement about intending a transitional arrangement naturally wouldn't resolve the uncertainty.

IMHO the damage to people and the market from leaving the uncertainty hanging is far worse than being committed not to disadvantage LISA holders at least on the contributions they have already been able to make.  

eskbanker

Alexland said:

eskbanker said:

I think there's a limit to how far they could have gone without prejudicing the consultation - guaranteeing no disadvantage would be too far IMHO, but conversely any lesser and more generic statement about intending a transitional arrangement naturally wouldn't resolve the uncertainty.

IMHO the damage to people and the market from leaving the uncertainty hanging is far worse than being committed not to disadvantage LISA holders at least on the contributions they have already been able to make.  

Of course nobody likes uncertainty, but is there any actual evidence of "damage to people and the market"?

Alexland

eskbanker said:

Alexland said:

eskbanker said:

I think there's a limit to how far they could have gone without prejudicing the consultation - guaranteeing no disadvantage would be too far IMHO, but conversely any lesser and more generic statement about intending a transitional arrangement naturally wouldn't resolve the uncertainty.

IMHO the damage to people and the market from leaving the uncertainty hanging is far worse than being committed not to disadvantage LISA holders at least on the contributions they have already been able to make.  

Of course nobody likes uncertainty, but is there any actual evidence of "damage to people and the market"?

Not yet but as press coverage grows on LISA withdrawal I expect it will eventually show up in the stats.

eskbanker

Alexland said:

eskbanker said:

Alexland said:

eskbanker said:

I think there's a limit to how far they could have gone without prejudicing the consultation - guaranteeing no disadvantage would be too far IMHO, but conversely any lesser and more generic statement about intending a transitional arrangement naturally wouldn't resolve the uncertainty.

IMHO the damage to people and the market from leaving the uncertainty hanging is far worse than being committed not to disadvantage LISA holders at least on the contributions they have already been able to make.  

Of course nobody likes uncertainty, but is there any actual evidence of "damage to people and the market"?

Not yet but as press coverage grows on LISA withdrawal I expect it will eventually show up in the stats.

So that's a 'no' then!

I should perhaps clarify that I'm playing devil's advocate here and do understand the point you're making - I just had a quick look around for the press coverage you're referring to and came across a link to the piece on this site after Martin Lewis's post-budget chat with Rachel Reeves, which did touch on the above point that migration will be considered as part of the consultation rather than being a prerequisite, as well as her recommendation not to do anything differently in the mean time:

Martin Lewis: "[Reading out a viewer's question:]'Could you ask the Chancellor why they can't change the £450,000 cap on Lifetime ISAs [LISAs] before the consultation?'. We've discussed this many times. 'So many are stuck and can't wait for a consultation.'"

The Chancellor Rachel Reeves: "The consultation is getting up and running. We want to get this right. We're going to introduce a new product, a better product. This is the system we inherited. We are doing that consultation."

Martin: "But people with LISAs now are very worried. I'm getting people saying, 'should I take my money out of a LISA right now because of this?'. Chancellor, I could do with your help, so that they have some legitimate expectation of what's going to happen."

The Chancellor: "Well we'll crack on with this consultation and make sure that the new product works better than the one it's going to be replacing.

"But I would encourage people, if you've got money in a LISA at the moment; nothing is changing. Of course, as part of that consultation, we will look at the price of the property you can buy and we will look at that for people who have already got money in a LISA."

Martin: "And if you have a LISA, do you think you'll be able to put the whole thing [in] to the new product if you wanted to?"

The Chancellor: "That's why we're having a consultation — to answer these questions."

Martin: "I’ll be pushing you for that."

The Chancellor: "And I really encourage you and Andy, and all your viewers who have got views on this, to feed into that consultation, so we get it right."

https://www.moneysavingexpert.com/news/2025/12/martin-lewis-lifetime-isa-chancellor-budget/

Alexland

eskbanker said:

So that's a 'no' then!

Things can be true before they are proven sometimes it just takes time for the statistics to record what s happening.

Martin Lewis's post-budget chat with Rachel Reeves, which did touch on the above point that migration will be considered as part of the consultation rather than being a prerequisite, as well as her recommendation not to do anything differently in the mean time:

If I was deciding if to start/continue saving in a LISA towards a qualifying property purchase those weak comments wouldn't reassure me and I'd be left wondering what to do.