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Lifetime or Help to buy

edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
2 replies 811 views
EFC1234EFC1234 Forumite
3 posts
edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
Hi,

I am looking to open an ISA and couldn’t decide between a Help to Buy or the Lifetime. When I weighed up the options and listen to Martin on This Morning it seemed the lifetime would be better but now I am seeing everywhere that now is the time to open a help to buy before it goes so do I just open the H2B? My partner has a H2B already so we can use it together, can you mix and match ISA’s so one have H2B and Lifetime. Can someone help advise me as I’m so confused. Thanks!

Replies

  • masonicmasonic Forumite
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    You could each have a different product and use them together for the property purchase, providing the conditions of both schemes are met. A LISA will be better in the long run if you are able to save closer to £4k per year than the £2.4k allowed for a HTB ISA. Provided you won't be wanting to buy within the next 12 months.

    You could yourself have both - a LISA to claim the Government bonus and a HTB ISA for the high interest rate. But you can't claim the Government bonus on more than one of your accounts.
  • Rich2808Rich2808 Forumite
    951 posts
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    Are you intending to buy a property worth over £250,000 outside London (quite likely in the south east)? If so then you won’t be able to claim the help to buy isa bonus. The limit for the lifetime isa is £450,000 nationally – whereas for the HTB isa this only applies if buying in the 33 London boroughs (you can do a postcode search here if not sure https://www.gov.uk/find-local-council) .

    The help to buy isa is still a good savings product though as long as you remain a first time buyer (even if you never claim the bonus) – as these accounts generally pay 2.5% plus whereas instant access cash isas rarely pay more than 1.5%.

    My suggestion is open both – you must open a HTB isa before 30 November and a lifetime isa before you reach 40. The former is useful if you want to buy soon – and within the limits above – the latter if its more medium to long term as the potential bonus when buying is bigger (i.e. £3k max for the HTB isa but £1k a year for as long as you hold the lifetime isa before buying).
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