22 November 2019
The Government’s ‘Help to Buy’ ISA is closing for new accounts at midnight on 30 November 2019. If you open one before this date, you can continue saving into it until November 2029. If you are saving to buy your first home, save money into a Help to Buy ISA and the Government will boost your savings by 25%. So for every £200 you save, you receive a Government bonus of £50. The maximum Government bonus you can receive is £3,000. Even if you are unsure if you or your child will use it, these accounts can be opened with as little as £1 and once the deadline passes it will no longer be available.
Another ISA which is currently available is the Lifetime ISA. This also provides a 25% Government bonus, however it is much more restrictive, i.e. there are penalties for early withdrawal. While the maximum bonus you can receive from the Lifetime ISA is higher than the bonus you can receive from the Help to Buy ISA, there are no current plans to close this scheme and therefore one of these could be opened in the following tax year. Additionally, savings in a Help to Buy ISA can be moved into Lifetime ISA without incurring a penalty.
Due to this and the impending deadline, I would urge you to consider opening a Help to Buy ISA before this opportunity is lost.
Additional Information:
In a Help to Buy ISA, you can save up to £200/month and whatever you save into it, the government will boost this by 25% up to a maximum bonus of £3,000.
If you purchase a property with a partner, each first-time buyer can use their ISA, meaning a bonus of up to £6,000. The Help to Buy ISA can be used alongside other government schemes, i.e. Equity Loan/Shared Ownership.
To qualify, you must:
- Be 16 or over
- Have a valid National Insurance number
- Be a UK Resident
- Be a first-time buyer
- Not have opened an ISA since April 2019
To receive the bonus, the property being purchased must:
- Be in the UK
- Have a purchase price up to £250,000 (or £450,000 in London)
- Be the only home you will own
- Where you intend to live
- Be purchased with a mortgage
For further info in relation to the Help to Buy ISA, please see:
https://www.helptobuy.gov.uk/help-to-buy-isa/how-does-it-work/
If you have any queries or would like to discuss this topic further, please contact your local UHY adviser.
