What is the difference between a Help to Buy ISA and a Lifetime ISA (LISA)

HELP TO BUY ISA

You can’t open a new Help to Buy ISA anymore, but if you already have one, you can keep saving into it until 30 November 2029 and claim your bonus until 1 December 2030.

  • It’s designed for first-time buyers over 16 who are saving for a home deposit.
  • The government adds 25% to your savings, up to a £3,000 bonus.
  • You can use it to buy a home worth up to £250,000, or up to £450,000 in London.
  • The bonus is paid when you buy a home, and the funds are available upon completion, and needs to be applied for by your solicitor before the completion date.
  • If you withdraw for reasons other than buying your first home, you won’t get the bonus, but there are no government penalties.

 

LIFETIME ISA

  • The Lifetime ISA is designed to help people aged 18 to 40 save for their first home or retirement. You can contribute until age 50 and access the money without penalty for other reasons at age 60.
  • The government adds a 25% bonus to what you save, up to £1,000 per year if you save the maximum £4,000 annually.
  • You can use it to buy a home worth up to £450,000 anywhere in the country.
  • The bonus is paid monthly, and the funds are available when you exchange contracts on a home purchase.
  • There’s a 25% government charge if you withdraw before age 60 for reasons other than buying your first home, unless you are terminally ill with less than 12 months to live.
  • After age 50, you can’t contribute or earn the 25% bonus, but your account stays open and continues to earn interest or investment returns.

To book an appointment with a member from our Residential Conveyancing Team, please call our office on 01702352511

Author: Michele Jackson

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