Help to Buy ISA – The Final Countdown

Many first time buyers would benefit from the Government’s Help to Buy ISA. But with the deadline for applications fast approaching, you’ll need to get a move on!

What is the Help to Buy ISA?

The Help to Buy ISA is a savings account specifically designed to help first time buyers get on the property ladder.

You can save up to £200 a month into the account, plus up to £1200 extra in the first month. Any interest you earn on your savings will be tax-free.

When you’re ready to put a deposit down on your first home, the Government will top up your savings with an additional 25% tax-free bonus payment. The maximum bonus is £3,000, which you’d get if you’d managed to put aside £12,000 in savings.

The bonus payments are per person, so if you’re buying as a couple, and you save £12,000 each, your bonus payment will be £6,000. This outperforms any rate currently available on the savings market.

The Help to Buy ISA is closing to new applicants on 30 November 2019, but if you already have an account or you open one by that date, you can keep saving into it until 30 November 2029 when the scheme will also close to additional contributions.

You’ll then have to claim your bonus by 1st December 2030, so you’ll need to plan carefully to make sure you’re in a position to buy and therefore claim your bonus by that date.

Anyone over the age of 16 can open a Help to Buy ISA, so if you regularly put money aside as a nest egg for your teenage children, this could be a better and more lucrative way to save for their future.

Help to Buy ISA FAQs

Can I access my cash?

Yes, you can access your savings at any time, plus the tax-free interest you may have earned by then. But if you’re not using it to buy a home, you won’t benefit from the 25% government bonus, so it’s well worth leaving your ISA alone until you’re ready to buy.

What kind of property can I buy?

You can use your ISA to buy any property, whether you’re after a new build or an existing property, a house or a flat. It just has to be in the UK and bought as your primary residence. You won’t need to go through your local housing association.

Who offers Help to Buy ISAs?

Help to Buy ISAs are available from a wide range of providers including Nationwide, NatWest, Barclays, Santander, Lloyds and Virgin Money. A full list is available here

Can I switch providers?

Yes. Down the line, if you find a better rate with a different provider, you’re free to switch, using an official ISA transfer to make sure you retain the tax-free status on your savings.

Can I keep my existing ISA?

Yes, there’s no need to close your existing accounts. However, you can only pay into one cash ISA (such as Help to Buy) and one stocks and shares ISA in any single tax year.

So if you’re planning to get on the property ladder in the next 10 years and haven’t yet opened your Help to Buy ISA, what are you waiting for? Don’t miss the deadline of 30 November 2019.

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