The Government Help To Buy ISA

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I have had to change my money box slightly, to fit in with buying a house… still think it needs to be a little bit bigger haha 😀

Money box

On the 1st December 2015 the government launched a new help to buy ISA. This is amazing for first time buyers like me, so what is it?

The help to buy ISA is basically a savings account where the government will top up your savings by 25%. However, there are certain rules that apply, for instance if you have already paid into another cash ISA this tax year you can’t open a Help to Buy ISA until 6th April 2016 (which sucks, because this applies to me) this would mean I couldn’t make the most of it at all because we are hoping to be moved out around April time. Don’t fear there is a way around it, Nationwide let you transfer your current ISA into a Help to Buy. Although, they were most unhelpful when I went into their branch, that I almost didn’t want to transfer my ISA to them because of how rude they were, but I don’t have any other choice until April!

Isa

If you haven’t paid into an ISA this tax year, then the possibilities are endless for you. Lots of banks are offering it, at the time of writing this I would recommend going with Halifax, as they have a 4% interest rate whereas most of the others only offer 2%.

To open a Help to Buy ISA you have to pay an initial deposit of £1,000, the minimum amount you need to save is £1,600 in order for the government to give you a 25% bonus, meaning they will give you £400 for FREE! Then every month if you deposit £200 (that is the maximum per month) into your ISA, you will get an extra £50 from the government. Hooray for free money! 🙂

The maximum amount in total you can receive is £3,000, however to get the full bonus you will need to be saving for just over 4 and a half years… that’s a long time, there’s no way I can wait that long! I will be happy with anything I can get.

The best part is the fact that the bonus is for each individual person and not each household, it means that Karl and I can save separately then put our money together at the end.

Another thing I better point out is the fact that you won’t see the bonus in your bank account, you won’t get any interest on it and you won’t be able to withdraw it. The bonus will go straight to your mortgage lender and you will only get it once you go to buy a home. This must be before 1st December 2030.

This scheme is only available between now and 30th November 2019 for new savers, but if you start saving for instance on 29th November 2019 you are allowed to carry on saving for however long you like. So hurry and don’t miss out!

I hope this helped, I am still learning myself as this whole process is very new to me. With the rising cost of house prices these days you want to try and get on the property ladder ASAP as they will just continue to rise. I’m sure this new scheme will help a lot of first time buyers.

Here is a link to a website which you might find helpful: moneyadviceservice.org.uk/en/articles/a-guide-to-help-to-buy-isas

Thanks for reading and speak to you soon.

Love Annie x

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Annie Quinn

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