Should you transfer your Help to Buy ISA into a Lifetime ISA when they launch in April 2017? MoneySavingExpert founder and executive chair, Martin Lewis, analyses both accounts and answers this burning question.
This is a great way of explaining these both - I wish I had realised that Martin had done a video on the same topic I have just done a video on !! WHOOPS - cannot compete with a PRO :(
This makes everything so clear, you're excellent! I rang Hargreaves and Lansdowne today and they said it'll be a £100 opening deposit for a lifetime ISA. Not too bad but not as good as £1 sadly!
I've got a help to buy isa and I spoke to a manager in NY bank and they said I would have to live in the property for 6- 12months before I could rent the property out and change lenders to a buy to let
Great video Martin, extremely clear and enthusiastic :) Which Lifetime ISA providers would you recommend? From what I've read so far only 3 firms have agreed to offer the Lifetime ISA (Hargreaves Lansdown, Nutmeg and The Share Centre) is it worth holding out or would you get started with saving a.s.a.p?
I think I'll change my help to buy to a life time isa, I would prefer to be able to hand over my deposit at exchange of contract as oppose to completion of sale.
the under £250,000 limit is a bit rubbish. where I live in Wiltshire all new builds that we looked at were above £250,000 for a small 3 bed house. the only thing lower was tiny 2 beds or coach houses or flats
An important difference is that you can withdraw money from you Help to buy ISA at any time and use it for anything you want. On the other hand, if you want to withdraw money from a Lifetime ISA and it's not for buying your first home and you're younger than 60 they will charge you 25% of your withdrawal... Also, interests of Help to buy ISAs are higher.
Hi MSE, I have a H2B and could move it to a LISA, but this would happen after the April date mentioned. On the numbers and allocation side, what does this mean for the transition? Less bonus?
'As long as you've got 16,000 in there you can use it towards the mortgage deposit straightaway' - is that correct? I thought if you only have 4,000 in there, but you were putting down the deposit and getting a mortgage you'd be able to use the Help to Buy ISA?
Interesting but I have one question. I cannot use the bonus from Help to Buy towards exchange but I can use it towards completion. But I already payed the entire deposit on exchange because it is required so there is nothing else to pay. Therefore how - please enlighten me - how am I allowed to use this bonus? I don’t understand and it’s not clear. My solicitor stated there is no way I can get cash back and I need to use the bonus towards completion but everything is payed already. Very confusing
Excellent explanation, just a shame that no one seems to be offering a cash LISA. So far only Hargreaves Landsdown and Nutmeg are offering stocks and shares LISAs so I hope this changes soon!
Hi Sally, Skipton Building Society has been the first provider to confirm it'll be offering a LISA, but only from June. More in our LISA guide: www.moneysavingexpert.com/savings/lifetime-ISAs Thanks, MSE Rosie
Are lifetime ISAs and help to buy ISA only applicable when buying a new build, a brand new house or flat? Or can i use them to buy old properties as long as am a first time buyer?
If I've already got more than £4k in a help to buy isa and will be buying a first house quite soon, is there any point in me transferring it into my Lifetime ISA? Because I will get a 25% bonus on the help to buy anyway, (which would equate to more than the £1k LISA bonus)? Thanks, Rob
I wish the government would just stop creating all these stupid complicated schemes. If they wanted to help savers then they should stop punishing savers by balancing the books and allowing the BoE to raise interest rates.
@@xHenry3110 low interest rates = less people saving = more people spending their disposable income. Essentially, lining the pockets of the large corporations etc. Only a guess though, might not be what they mean.
Also Skipton seem to be only company that are offering a somewhat normal lifetime ISA that is described on internet, however this cannot be joint. Does that mean if I was to buy a house with someone in the future we couldnt join our lifetime ISAs together for a house deposit?? Thank you.
Hi Alice - you can combine two lifetime ISA with a partner - as long as you are both first-time buyers! Hope that helps - I just did a video on this very topic so been researching :) Hope this helps!
Do you need to put the £1 on the first day of the new tax year or can you put it in at any point? I was thinking put £1 at beginning tax year 2019, then keep putting into HTB until beginning tax year 2020 and transfer it all over. However what if this is more than £4000 as there is only £4000 limit ? And i swear you cant have HTB and lifetime ISA at same time?? but on here he is saying you can
Am I right in thinking that if I have more than 4000 in my HTB ISA at the time I transfer, I would lose the bonus on everything above that? Would I be able to transfer in the full amount?
Hi, full info on transferring a Help to Buy ISA into a Lifetime ISA is in our LISA guide, point 5. www.moneysavingexpert.com/savings/lifetime-ISAs Thaks, MSE Rosie
Is this really the case, if I open a LISA I only have a year to transfer my Help to Buy ISA savings into it. Once that year has passed I can never transfer it over to it?
Hi Daniel, there are no penalties for early withdrawal from a Help to Buy ISA (you just lose the bonus). For Lifetime ISAs, there is a penalty on top. More in our LISA guide: www.moneysavingexpert.com/savings/lifetime-ISAs Thanks, MSE Rosie
Hi Craig, providers haven't released details of interest rates on offer yet, but we'll be sure to update our guide when they do: www.moneysavingexpert.com/savings/lifetime-ISAs Thanks, MSE Rosie
@@moneysavingexpert I have on question i cant seen to find the answer to help to buy isa the money u get given is it a loan, do you have to repay it in some way or is it a literally gift
Hi, you can use a LISA for both retirement and buying a first home. Or can also keep your H2B ISA open and use both. More info in our LISA guide www.moneysavingexpert.com/savings/lifetime-ISAs Thanks, MSE Rosie
Great video except it's missing the withdrawal penalties. Help to Buy ISA has no withdrawal penalty, LISA has a 6% withdrawal penalty before age 60 (you lose the 25% bonus with both of course).
I use the MoneyBox app its really easy to get started :) Did a vidoe on it - if that helps :) ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-VhBsq7Mef2w.html
me and my girlfriend saved into a help to buy ISA Great untill we went to use it and due to our house being over £250,000 meant you we couldn't use it. I guess we should of read the all the details. Luckily for us they dropped the stamp duty for first time buyers which saved us nearly £4000
are you going to buy in the next year? if not then the LISA is the best option - much better return on your savings :) also did a video on this if that helps - ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-VhBsq7Mef2w.html :)
Hi, a few providers will be offering a LISA, though it'll be slim pickings. Full info in our Lifetime ISA guide: www.moneysavingexpert.com/savings/lifetime-ISAs Thanks, MSE Rosie
I have a question regarding interest rates. A help-to-buy ISA has an interest rate of 2.5%, whereas the best LISA rate, currently with Moneybox, is 1.4%. If I begin saving now, should I open a help-to-buy ISA to take advantage of the higher interest rates and then switch to a LISA if the rate at which I can save increases?
I have done exactly what you are suggesting. I have a lifetime Isa that i try to put £200 in a month, then my help to buy I stick the mini of £20 a month and get the 2.5% interest rate
Can i have a help to buy isa and lifetime isa and pay in them both in the same year? I opened a help to buy for my daughter just before it closed. We don't have any plans for her to buy a house in the next couple of years. Are there any benefits and is it possible to have a help to buy and LIsa open at the same time and pay into them both in the same year? e.g could she pay £4000 in the LISA and £2000 in to the Help to buy? I know you can only get the bonus from 1 to use on the property so i'm thinking...... If she saved £4000 per year in the help to and then used that to buy her house eventually in say 5 years, the bonus would be higher than she could ever get in the help to buy. However, the interest rate on the help to buy is better than a current account or any saver at the moment. So, i'm thinking to continue to pay into the help to buy as well. BUT, would she loose all the interest that she has gained on the help to buy when she finally withdraws it after 5 years or in 2030 or is it just the gov bonus that she would loose? Thank you.
Hi, thanks for all this. So I spoke with Barclays and they said I cannot have a Help To Buy ISA and a Life Time ISA at the same time, I explained your suggestion of opening one to get the clock ticking but they said I couldn't! So am I miss understanding this?
Hi Katrina, you can have both but you can only get the bonus from one of the schemes! I just did a video about this topic which is more up-to-date and informative I hope!
I have just swapped £2k from a HTB ISA into a LISA. £600 of this was paid before 6th April 2017. I then added another £2k to top up to my £4k LISA limit. Because the £600 was paid into the HTB before 6th April 2017. Does this mean i can actually put £4.6k into my LISA for this tax year? If anyone knows and can share with me, it will be greatly appreciated.
Hi Ashley, to confirm you cannot put more than £4k into a LISA in anyone tax year. If you're looking for extra help to top up your LISA you should check out www.homewards.io
From Skipton Building Society's (the only provider for a cash LISA) website under 'Can I withdraw my money?' - 'From tax year 2018/2019, withdrawals or account closures will normally have a government charge of 25% of the amount withdrawn. Sections A and B in the Online Cash Lifetime ISA Key Features document which explain why you may get back less than you paid in and exceptions to the withdrawal charge.' 2 years of savings. £8000 topped up to £10,000 by gov, charged £2500 to withdraw.... so you get back less than you put in...
Hi Ben, only a handful of providers have confirmed they'll be offering a LISA, and will be launching at different times. More in our guide: www.moneysavingexpert.com/savings/lifetime-ISAs Thanks, MSE Rosie
Hi Nicola, really depends on how likely you are to buy a home. If you take a Lifetime ISA out, but then decide not to buy a home and want to withdraw the money then you will be penalised i.e. less money than you put in. Otherwise, you have to keep it in until you're retired to not get a penalty. I wrote this blog that should help explain medium.com/homewards/saving-for-a-house-help-to-buy-isa-or-lifetime-isa-46dbdb6f0efe
But isn't all these schemes just a loan ? Like ots not a gift from them you have to repay them? Or they own equity in your house? Or ? I'm confused my girlfriend took one out thinking its just a gift bonus towards helping and I said to her im sure you will have to pay the money you get given from the government back
However if your using the lifetime ISA for retirement purposes I think you can still benefit from that one even in Norway but confirm this with the provider.
so if I open a help to buy ISA tomorrow 21st June. and I open a lifetime ISA on the 25th June. I could take the £850 profit on 21st June 2018. and transfer money on 22nd June 2018 to my lifetime ISA. and pick up that extra grand.??????
Slightly misleading, you can only transfer 4000 so if your h2b ISA is over the 4000 limit it will take 2 years to transfer the full amount if under 8000, just found out to my detriment
Has it been explained how the 25% "bonus" for first time buyers will work exactly - ie is it like an APR interest rate on the contributions? If for example, I open a lifetime isa in April 2017 with just £1, and then in March 2018 I deposit £3999 AND transfer say £2000 from a previously opened help to buy isa, would I get £1500 added to my lifetime isa as a bonus in April 2018 (25% of the total £6000) or just a fraction of this?
Hi Mat - It doesn’t work like interest, really, in that it doesn’t matter when in the first year you put your £4,000 in. Provided it’s in the account by 5 April 2018, you’ll get the full £1,000 bonus. In the scenario you describe, provided all the Help to Buy ISA cash was contributed to the H2B ISA before 6 April 2017 (if after, it affects how much you can put in the LISA), you’d get the bonus on the whole lot - so £1,500. Hope it helps!
