Help to Buy queery

JF2019 · 21 November 2019 at 5:45PM

Hi,
I'm looking into this with my DD who recently turned 16. I know she could opt for a split ISA with Natwest or Nationwide but I was wondering if the following is possible:
Take out a standard H2B ISA (not split). Add what she can up to the max amounts.
In 2 years time time she is due a lump sum, hopefully not far of 20k so she would not add to the H2B ISA that financial year but instead put the lump sum in a cash ISA.
Then the following years, still do not add new money to the H2B ISA or the cash ISA but transfer from the cash ISA to the H2B ISA (could this be a lump sum of £2,400 or would it need to be £200 per month?)
Am I right in thinking that she could have both types of ISA at the same time but could only pay into one of them in any financial year? Therefore, is what I am thinking correct?
Thank You
J

eskbanker · 21 November 2019 at 6:45PM

Yes, she can have both a HTB and a non-HTB cash ISA but can only pay into one in any given tax year, so could take a year out from paying into the HTB and drip into it again at £200/month the following year.

However, it would probably make more sense to put the £20K somewhere other than a cash ISA and avoid missing a year of funding the HTB.

masonic · 21 November 2019 at 6:47PM

The transfer would need to be £200 per month, and she wouldn't be able to do a transfer of £200 and put £200 of new money into the account, so I'm struggling to see the benefit of using a cash ISA at all.

She could instead stick £2,400 into a 1, 2 and 3 year fixed term account (depending on how long she will wait before buying) and then earn a bit more interest on that money while it is waiting to be added to the HTB ISA.

SusanBe · 21 November 2019 at 7:13PM

Help to Buy ISA - question

I have an existing Cash ISA (that I've had for a number of years) and I put £130 into it in May-19 (so this tax year). Does that mean I can't open a new "Help to Buy ISA" ??
Or can I close my cash ISA and open a new H2B ISA before the deadline? Thanks

masonic · 21 November 2019 at 7:43PM

Is your existing cash ISA flexible? If so, you can remove the £130 and you would be free to open and fund a HTB ISA before the deadline. This would potentially allow you to make a deposit of £1200 in the first month. If not, you can open a HTB ISA and transfer the £130 in full to it, after which you could fund as normal, but you'd miss out on the extra £1000 you can deposit in the first month.

JF2019 · 21 November 2019 at 7:51PM

Thank you, that's very helpful.

Help to Buy queery

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free