Maxing Out HTB ISA move to lifetime ISA?

[jiltedjen]

Morning HPC Hive mind

for those of us who who keep up to speed with personal finance and jumped on the HTB ISA as soon as it came out, it means come April 2019 we will reach the maximum bonus.
Is it worth then transferring over to a lifetime ISA? whos the best provider? is skipton the only provider?

the 25% tax free saving plus skiptons interest at 0.75% means a real 25.75% interest rate.

so it seems come april it makes sense to move the HTB ISA over to skipton? 

Whats your plans?

 

[Lavalas]

Wasn’t there a deadline of end March 2018 for transferring HTB ISA into LISA whilst still retaining the accrued bonus?

Not sure - I thought that you could only do that in the first tax year after LISAs were created but it could be that you can only do it in the first tax year since you created your LISA. The former would seem unfair.

I transferred mine to Skipton in January and yes they are the only cash LISA providers. I believe there are many S&S ones.

[jiltedjen]

something about not being able to use the Lifetime ISA to buy your first home if the account has not been opened for at least 1 year.

i think the tax year thing is just about what you can pay in and the transfer amount. doesnt seem all that simple really.

im starting to think that come April 2019 its not really worth transferring out. 

[Bear Hug]

43 minutes ago, Lavalas said:

Wasn’t there a deadline of end March 2018 for transferring HTB ISA into LISA whilst still retaining the accrued bonus?

Not sure - I thought that you could only do that in the first tax year after LISAs were created but it could be that you can only do it in the first tax year since you created your LISA. The former would seem unfair.

I transferred mine to Skipton in January and yes they are the only cash LISA providers. I believe there are many S&S ones.

I transferred HTB ISA to LISA but continue to save in HTB.  I know I can't use both for buying a house, but HTB ISA pays tax free interest which is higher than in my current account.

[jiltedjen]

apparently you can have both, but the real kicker with the lifetime ISA is you cant use it for a year.

So you have to open it with say a single £1 as soon as possible, just to start the clock ticking on it. and meanwhile keep saving in the HTB ISA, you cant use both to buy a house, so if like me i do not have a lifetime ISA, i need to open one now to start the clock ticking, 

maybe put £4k into that this year. to get the LISA bonus.
Then if by April 2020 i still have not bought a house, i can transfer that into the LISA.

the real kicker is the missed out 'free money' from not taking advantage of the special transfer rules prior to april which allowed transferring over without penalty. 

all a bit of a faff really. 

[Lavalas]

1 hour ago, Lavalas said:

Wasn’t there a deadline of end March 2018 for transferring HTB ISA into LISA whilst still retaining the accrued bonus?

Not sure - I thought that you could only do that in the first tax year after LISAs were created but it could be that you can only do it in the first tax year since you created your LISA. The former would seem unfair.

I transferred mine to Skipton in January and yes they are the only cash LISA providers. I believe there are many S&S ones.

This article seems to do a good job of describing what I was trying to recall...

https://www.google.com/amp/s/www.telegraph.co.uk/personal-banking/savings/use-isa-loophole-now-1100-savings-boost/amp/

[A third of everything]

For those here who seem quite savvy - if you have a HTB isa but have never used it (any payments made bounced back) can you just go open another one elsewhere or is there a special process?

[MARTINX9]

On 21 July 2018 at 20:31, A third of everything said:

For those here who seem quite savvy - if you have a HTB isa but have never used it (any payments made bounced back) can you just go open another one elsewhere or is there a special process?

You can only have one help to buy ISA account.

If you didn't make the maximum first month payment allowed of £1200 it makes more sense to close the existing account and open a new one and max out £1200 in month one or as much as you can afford.

However if you don't want to buy in the next few months a life time ISA makes more sense - the HTB ISA only has a property value limit of £250k outside London whereas the Lifetime ISA has a limit of £450k nationally.

[A third of everything]

19 hours ago, MARTINX9 said:

You can only have one help to buy ISA account.

If you didn't make the maximum first month payment allowed of £1200 it makes more sense to close the existing account and open a new one and max out £1200 in month one or as much as you can afford.

However if you don't want to buy in the next few months a life time ISA makes more sense - the HTB ISA only has a property value limit of £250k outside London whereas the Lifetime ISA has a limit of £450k nationally.

I'm in London so can benefit from the higher limit (hahaha) - was under the impression though that even an unused one would discount the first month higher deposit amount if another one was opened? We save over that every month (living with family) so would be handy to make the most of the additional bonus if possible 

[jiltedjen]

The lifetime ISA, there is nothing stopping you from saving for many years effectively your earnings but tax free.

Then after several years, buying a flat/house, and then selling that to get access to the tax free funds?

 

[EMac]

No but it's an ISA so is by definition tax free to access the money after you reach the required conditions such as being over 60 but yes, purchasing a property with it (provided you meet the conditions of a first time buyer) then selling up would essentially give you access to the funds early without penalty, I think that is within the rules though a bit cheeky.

[Lavalas]

Also you can only put in 4k a year. A small portion of your earnings, I assume.

[shatner's bassoon]

On 21/07/2018 at 12:30, jiltedjen said:

for those of us who who keep up to speed with personal finance and jumped on the HTB ISA as soon as it came out, it means come April 2019 we will reach the maximum bonus.

 

Hi Jen, just wanted to query your April 2019 date of reaching the maximum HTB bonus as I'd assumed it was later than this.  

According to this article, it commenced on December 1st 2015 and mentions it would take 5 years to reach the £12k needed to get the £3k 25% bonus (even including the initial £1k deposit you were allowed at the start).

So, should be reached in December 2020??

http://www.thisismoney.co.uk/money/mortgageshome/article-3323713/The-Help-Buy-Isa-launching-December-1.html

Interested to see if I've misunderstood something (I was also straight on to this when it started). 

[MARTINX9]

16 hours ago, shatner's bassoon said:

Hi Jen, just wanted to query your April 2019 date of reaching the maximum HTB bonus as I'd assumed it was later than this.  

According to this article, it commenced on December 1st 2015 and mentions it would take 5 years to reach the £12k needed to get the £3k 25% bonus (even including the initial £1k deposit you were allowed at the start).

So, should be reached in December 2020??

http://www.thisismoney.co.uk/money/mortgageshome/article-3323713/The-Help-Buy-Isa-launching-December-1.html

Interested to see if I've misunderstood something (I was also straight on to this when it started). 

April 19 is the last date to open a help to buy ISA - although you can transfer to another HTB after that date. You have until 2030 to invest in a HTB ISA and claim the 25 per cent government bonus.

Edited July 27, 2018 by MARTINX9