As the deadline to transfer in a Help to Buy ISA approaches, we examine the Lifetime ISA as an investment choice
There has never been a better time to start your lifetime ISA
- During the 2017-18 tax year ONLY, those who already have a Help to Buy ISA will be able to transfer these funds into a Lifetime ISA and receive the government bonus on those savings.
- With the deadline looming, we can help you transfer your money from your Help to Buy ISA to our Lifetime ISA
- If you are aged between 18-39 you can take advantage of a 25% government savings bonus
- To help encourage people to take advantage of this one-time opportunity, we are going to give £4000 to someone who transfers a Help-to-Buy ISA to us before the end of the tax year
- Do you or a loved one have a Help-to-Buy ISA? That £4000 could be yours or theirs
If you’re thinking about transferring an existing Help to Buy ISA into your Lifetime ISA in this tax year, we advise you don’t delay, our window to do so closes on 29 March 2018. After this date, you will no longer be able to apply to transfer your help-to-buy ISA into a Lifetime ISA in the 2017/18 tax year with us. There are some key benefits to having a Lifetime ISA over a Help to Buy ISA;
|Help to Buy ISA||Lifetime ISA|
|Can be used for a property valued up to £250,000 (£450,000 in London)||Can be used for a property up to £450,000 in value|
|Can be opened from 16+||Can be opened by customers who are aged 18-39 years old|
|You need to save regularly (monthly)||Can be funded in one lump sum, or with monthly contributions|
|Receive Government bonus on savings up to £3,400 in the first year of opening (max £2,400 thereafter)||Receive Government bonus on savings up to £4,000 a year|
|Can only be used for your mortgage deposit, your 25% savings bonus can only be accessed after exchange.||Can be used for both your exchange deposit and mortgage deposit|
|Can be used once you have saved £1,600+||Can’t be used within the first 12 months of opening|
During the 2017-18 tax year only, those with a Help to Buy ISA can transfer the savings they have built up to 6 April 2017 into our Lifetime ISA, and still be able to deposit an additional £4,000 into our Lifetime ISA in that year. The entire amount saved will benefit from the 25% government bonus. There is however an initial minimum holding period of 12 months from the initial funding of your account, before withdrawals can be made for a home purchase.
For more information on the differences and similarities between Lifetime ISAs and Help to Buy ISAs, see our Lifetime ISA vs Help to Buy ISA page.
We have an example below to demonstrate how this applies;
Claire has a Help to Buy ISA which is valued at £3500 on 5 April 2017. She transfers her Help to Buy ISA into a Lifetime ISA on 1 March 2018 (2017/18 tax year) and qualifies for the 25% government bonus (£875). Claire can also contribute an additional £4,000 (Lifetime ISA allowance) for the 2017/18 tax year and receive the government bonus of £1,000 for this too.
Want the chance to win £4,000?
We are entering every customer who transfers their Help to Buy ISA into our Lifetime ISA before the 29th March, into a prize draw to win £4,000! Terms and conditions apply, these can be found here.
You can find out more information and we have answered some of our most frequently asked Lifetime ISA questions so check if your query is resolved in our Lifetime ISA section.
A Lifetime ISA may not be suitable for everyone
You must be 18-39 years old to open a Lifetime ISA and you can pay in up to £4,000 each tax year, as part of your overall £20,000 ISA allowance. You will incur a 25% government charge on any money you withdraw before you are 60, unless you are using it to buy your first home or are terminally ill, therefore you may get back less than you paid in. You may also incur this charge if you transfer your Lifetime ISA to another type of account. Tax allowances and the tax benefits of Lifetime ISAs could change. Saving in a Lifetime ISA may affect your current and future entitlement to means tested benefits. Please seek independent financial advice if you are unsure whether a Lifetime ISA is suitable for you. The value of investments can fall as well as rise, and you may get back less than you invested.