If you’re saving for your first home, have you considered the Help to Buy ISA? This beneficial scheme is open to anyone 16+ looking to save for their first home – but you will need to act fast to reap the rewards!
In this unique scheme, as an individual you need to set up a Help to Buy ISA through a bank of your choosing, the government is then providing bonuses of 25% on top of your savings. Applicants only have until Saturday 30th November 2019 to open an account, where an initial deposit of just £1 is required. The saving facility continues for another ten years, up to 2029.
This great scheme can boost your savings by £3,000. Save up to £200 a month, with an option to kickstart the scheme in your first month by depositing a lump sum of up to £1,200.
The minimum government bonus is £400, you need to have saved at least £1,600 before you can claim your bonus. The maximum government bonus you can receive is £3,000 – to receive that, you need to have saved £12,000.
The ISA works per individual, even for partners/friends buying the same property, meaning if you are both first time buyers, you could receive up to £6,000 altogether. Even if your partner has owned a property in the past, as an individual, you can still benefit, however they will not. The Help to Buy ISA is available to all UK resident first time buyers from the age of 16, with a National Insurance Number, who do not already have another active cash ISA in the same year.
In addition to the government bonus, you will receive interest ranging from 1.5% – 2.5% depending on your chosen bank, click here for a brief selection of the choice available. The Help to Buy ISA also has the added flexibility of being able to withdraw your cash at any time, but not the added government amount – read on to understand how that is issued. As an added bonus, the ISA can be used in combination with other great Help to Buy Schemes, including the Help to Buy: Equity Loan Scheme, and Shared Ownership. The Help to Buy ISA bonus will need to be applied for by your solicitor, when you buy your first new property.
If you are in a good financial position to deposit maximum savings, an alternative ISA available for first time buyers and for saving for later life is the Lifetime ISA, or LISA. This ISA is available from 18-39. The bonus is paid once the ISA has been opened a year or more, with the benefit that the LISA bonus can be larger. You can save up to £4,000 a year, as a lump sum or otherwise, with the bonus paid monthly. This ISA is perhaps more appropriate for those most likely to buy a home costing up to £450,000 and will not be buying a house within the next year. The money is not available to withdraw until the first year is completed, but there is the possibility of holding stocks and shares in your LISA, or a combination of both.
You can open both of these ISAs with as little as £1, with the limitation that they cannot both be opened within the same tax year. If you do open both ISAs, the bonus will only provided on one account. If you are not sure which ISA is for you, the best thing to do is to seek independent financial advice.
Act now to benefit from these great schemes. You could be well on the way to owning your own home, with a bigger, brighter future ahead!