Combining ISA and LISA?

JJE239 wrote: »

If he has a LISA and I have a Help to Buy ISA, is the maximum amount of the property £250,000 or £450,000.

The maximum property value that could be bought and use his LISA without penalty is 450k.

The maximum that could be bought and use your HTB bonus is 250k outside London or 450k in London

If you bought as a couple a house that was 250k, he could use his LISA without penalty and you could use your HTB bonus.

If you bought as a couple a house that was 251k, he could still use his LISA without penalty and you could still use your HTB savings that you had but would not be able to claim any bonus on your HTB (unless the property was in London).

Also, is this the best way to save the money, or should we be looking at other high earning options too?

If you are going to end up getting a property for putting at least £200pm into your HTB ISA you are maximising the free money that you can get from the government, which will be better over the next couple of years than investing in a different savings product that pays a higher interest rate because nobody is paying high enough interest rates to beat your 25% free money. If you put less than £200pm into your HTB you are missing out on free money. But if you are eventually going to buy a property that's over the limit to be able to be allowed to claim the bonus, you should just go for the highest interest rate you can find for all the money you want to save.

If you have more than £200pm to save you should put the excess into the highest interest rate account you can find. For example Nationwide do a regular saver account at 5% on up to £250pm if you have one of their current accounts (and one of the current account types they have pays 5% on the first £2.5k too).

Your husband should max out his LISA each year at £4k to maximise his free money but he does not need to put it in every month, he could put the whole £4k in the last week of the tax year if he wants. So before it gets to the last week of the tax year he can be saving somewhere else at a higher interest rate (e.g. Nationwide for £250pm) and just move it over later eventually, before the deadline.

If your husband is not going to be able to save enough to max out his £4k a year limit to get the maximum bonus then if you have more money than fits into your HTB it would make sense to put your excess savings into his LISA (though no need to do it until close to the end of the tax year).