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    • JJE239
    • By JJE239 14th Apr 18, 10:06 AM
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    JJE239
    Combining ISA and LISA?
    • #1
    • 14th Apr 18, 10:06 AM
    Combining ISA and LISA? 14th Apr 18 at 10:06 AM
    Both my husband and I will be first time buyers when we start looking to buy in about 2 years time. I am over 40 so can't open a LISA but he is under 40, so can. 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.
    Also, is this the best way to save the money, or should we be looking at other high earning options too?
Page 1
    • Alexland
    • By Alexland 14th Apr 18, 10:45 AM
    • 2,388 Posts
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    Alexland
    • #2
    • 14th Apr 18, 10:45 AM
    • #2
    • 14th Apr 18, 10:45 AM
    You would need to meet the rules of both schemes so the HTB ISA limit would apply if claiming the HTB bonus.

    The 25% bonus is hard to beat but you might want to delay the LISA contribution until towards the end of the tax year (leaving enough time to resolve any unexpected issues) so you can save at a higher interest rate elsewhere in the meantime.

    We often suggest the Nationwide 5% Flex Direct accounts and associated 5% easy access regular savers.

    Alex
    Last edited by Alexland; 14-04-2018 at 10:53 AM.
    • bowlhead99
    • By bowlhead99 14th Apr 18, 10:54 AM
    • 7,832 Posts
    • 14,303 Thanks
    bowlhead99
    • #3
    • 14th Apr 18, 10:54 AM
    • #3
    • 14th Apr 18, 10:54 AM
    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.
    Originally posted by JJE239
    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).
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