Help to Buy ISAs and the Lifetime ISA

What’s going to happen to the Help to Buy ISA?

You’ll be able to open a Help to Buy ISA until 30 November 2019. Beyond that date, if you have one, you can keep saving in it until 30 November 2029. You must claim your bonus by 1 December 2030.

Head-to-head: The Lifetime ISA vs the Help to Buy ISA

Lifetime ISA Help to Buy ISA
Age to open one 18-39 16+
Annual contribution limit £4,000 £2,400
Contribution type Any – lump sum or monthly Monthly
Government bonus 25% of contributions 25% of contributions
Maximum bonus £1,000 per year until you’re 50 £3,000 total
Bonus paid Annually for the first year of the scheme, monthly from April 2018 When you buy your home
Earn interest/growth on bonus Yes No
Eligible ISA type Cash or stocks and shares Cash
Maximum property price £450,000 £450,000 in London, £250,000 everywhere else
Earliest withdrawal period to buy first home with bonus After your Lifetime ISA has been open for one year Once you’ve saved £1,600
‘Ineligible’ access penalty A 25% government penalty on the total value of the withdrawal None, you just don’t get the bonus

Can I transfer my Help to Buy ISA to Nutmeg?

No, we won’t be providing this service. Read our Help to Buy transfers FAQ

Can I have a Lifetime ISA and a Help to Buy ISA?

If you currently have a Help to Buy ISA you can continue to put money into it. You can transfer it to the Lifetime ISA (though not at Nutmeg), or you can choose to save into both — but you will only be able to use the bonus from one of them to buy your first property.

Can I transfer my Help to Buy ISA to a Lifetime ISA?

If you have a Help to Buy ISA, with certain providers (but not Nutmeg) you can choose to transfer your savings into a Lifetime ISA:

  • If you contribute to your Help to Buy ISA on or after 6th April 2017 and then choose to transfer it to a Lifetime ISA, it will count towards the £4,000 annual cap.
  • From 6th April 2018: if you decide to transfer your Help to Buy ISA to a Lifetime ISA, all transfers count towards your Lifetime ISA annual allowance — irrespective of when the contributions were made, i.e. including those made before 6th April 2017.

A Lifetime ISA may not be right for everyone

As with all investing, your capital is at risk. Tax rules may change in the future. If you are unsure if a Lifetime ISA is the right choice for you, please seek independent financial advice.

  • You must be 18–39 years old to open one.
  • If you need to withdraw the money before you’re 60, and it’s not for the purchase of a first home up to £450,000, or a terminal illness, you’ll pay a 25% government penalty. So you may get back less than you put in.
  • Compared to a pension, the Lifetime ISA is treated differently for tax purposes. You may be better off contributing to a pension.
  • If you choose to opt out of your workplace pension to pay into a Lifetime ISA, you may lose the benefits of the employer-matched contributions.