Why use HTB then move money into LISA?

bp5678 · 16 February 2019 at 9:14PM

I set up a HTB and LISA in March last year.

The problem is nearly a year on, I'm struggling to remember the reason I set up both and why I've done these direct debits. I'll explain what I've done and hopefully someone can work out why!

I paid in £1200 into my HTB in March 2018. I then set up monthly Direct Debits from my current account into my HTB (paying in £200 a month).

In March 2018 I also paid in £1.25 into my LISA.

It's now February 2018 and my monthly DD into my HTB is about to take place. This'll give me £3400 in my HTB.

I believe I was going to move all of my money from my HTB into my LISA just before it's been a year to reap the benefits.

How much should I pay into my HTB/LISA when it comes to it to max the benefits? I have plenty of money in my current account that is sitting there that I can bring across if necessary.

I set up my HTB/LISA on 19th March 2018 so should I move the money across before 19th March 2019 (as this would have been 1 year)?

Planning on buying a house at the end of this year (Nov-Dec 2019).

silvercar · 16 February 2019 at 10:39PM

You had to have had your LISA open for a certain time to get the bonus when you bought. That would explain why you opened it and put in a paltry sum to start the clock ticking.

You also need to transfer your HTB into your LISA before the LISA anniversary.

All explained here:

https://blog.moneysavingexpert.com/2016/07/24984/

diggingdude · 16 February 2019 at 11:30PM

LISA
Put £4000 in before the end of tax year to get the bonus of £1k. Put another £4000 in say 10th April and get another £1k bonus. Happy times

pink_pirlie · 17 February 2019 at 12:43PM

As others have said transfer in before the end of the financial year.

You will have been putting it into the H2B to benefit from the higher interest rate over the past year.
& Having both for the year gave you flexibility for Y1 and allows you to start the clock ticking on the LISA.

Another option would be to open a 5% regular saver and save the max in that through the year and transfer in to your LISA before 5 Apr each year.

bp5678 · 17 February 2019 at 1:35PM

pink_pirlie wrote: »

As others have said transfer in before the end of the financial year.

You will have been putting it into the H2B to benefit from the higher interest rate over the past year.
& Having both for the year gave you flexibility for Y1 and allows you to start the clock ticking on the LISA.

Another option would be to open a 5% regular saver and save the max in that through the year and transfer in to your LISA before 5 Apr each year.

Thanks. Would a 5% regular saver give me more interest do you think? And would I easily be able to take the money out of this account and move it if necessary (I know sometimes the money is "stuck" in there and I have to simply wait).

Just to confirm, if I want to buy my first property at the end of this year (December), then when the next financial year starts (after 5th April) I'll just put £4000 more into the LISA and I'll get another £1k? When would I receive this £1k the second time around?

bp5678 · 17 February 2019 at 2:08PM

diggingdude wrote: »

LISA
Put £4000 in before the end of tax year to get the bonus of £1k. Put another £4000 in say 10th April and get another £1k bonus. Happy times

Thanks. When would I get the second £1k bonus?

pink_pirlie · 17 February 2019 at 2:26PM

Takes 6-8 weeks from deposit to get the bonus. It is paid the end of the following month. So f you deposit 6 Apr you would get it around 28 May.
If you deposit on say 28 Apr you would also get it 28 May.

It takes up 30 days from when you request the money out the LISA to when you get it so if you're exchanging say mid December, start the process of withdrawing early November.

The 5% would get you more interest than the H2B and LISA whilst it is in there. There are some regular savers that allow you to withdraw penalty free (nationwide do for eg).

You do need to deposit the £4K for 18/19 into the LISA this FY and then you should deposit the £4K for 19/20 by September I would say if you're buying around December to ensure the deposit is paid before you exchange.

We have 1k sat in the LISA as the bonus wasn't paid in time. But we were probably one of the first buying with the LISA last year as we completed in April 2 days after after the early bonuses were paid. We were lucky HL released the bonus money in less than 24 hours in time for completion.

diggingdude · 17 February 2019 at 9:00PM

Get the first £4k in now it you can. Get the best £4k in the beginning of April (post new tax year) and the extra £1k will be there.

diggingdude · 17 February 2019 at 9:01PM

The extra £1k will be there in May it should have said. Silly phone not letting me edit

bp5678 · 17 March 2019 at 10:08PM

Just revisiting this as it's coming to the end of the tax year and I'm paranoid I'm going to do this wrong. I'm buying at the end of this year (Dec 2019).

-I have £15k in my current account.
- I have £3400 in my HTB (paying in £200 monthly).
- I have £1 in my LISA.
Should I move the £3400 into my LISA as well as moving 'the difference' (£600) from my current account into my LISA?
Alternatively the other option is to just move £4k straight into my LISA and not move any from my HTB?

diggingdude · 17 March 2019 at 10:59PM

Answered in your other thread

Why use HTB then move money into LISA?

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