Change to a LISA?

[skeemee]

2 DC have help to buy ISAs since age of 18, saving max allowable of £200pm.

DC1 is 24, looking to buy a property soon, would starting a LISA be pointless? They are saving like mad for deposit, way more than £200pm.

DC2 is 20, will be living at home for a while, can afford to save more. Can they open a LISA, and what would happen to the help to buy ISA?

I would hate for them to make a mistake by closing/transferring the ISA, and losing any govt input they may have accrued.

Hi op, I may be wrong so it might be better to look into this further but I believe you can only use a Lisa once it has been open for a year so if your dc1 is looking to buy in the next 12months it would be of no use.

@Littlebean13

Hi op, I may be wrong so it might be better to look into this further but I believe you can only use a Lisa once it has been open for a year so if your dc1 is looking to buy in the next 12months it would be of no use.

This is true

They can open a LISA even though they have a HTB. Why wouldn't it be worth it? It's free money. Where else would you get a guaranteed £25% return?

Martin Lewis has a really good video about if you should or shouldn’t change to a LISA, and you can only put £4K a year in BTW.

DS had a help to buy and it wasn’t worth him changing to a LISA when they first came out. DD started straight away with a LISA and has just bought, it massively incentivised her to get those regular 25% government contributions and she had around 21k banked in two years.

You can have both but can only use one when you buy your first house. So if you want to buy within a short time frame, you need to bear in mind that if you don’t use your LISA for a house purchase, you can then only access the money (without penalty) from age 60.
If you don’t use the HTB Isa you won’t get the bonus but at least you can take your money out without penalties.
Also, LISA money can be used for a deposit, HTB money is only available on completion.

Thank you all. Yes, this kinda confirms what I had in my head. DC1 will be buying within a year, so if they opened a LISA they couldn’t use it for property, and the funds would then be tied up til 60. Have I got this right?

DC2 different tho, as they have no intention of buying a house until older, but can save a fair bit meanwhile, so a LISA would be better for them. Would they need to close the HTB isa or just leave it earning interest until they need the cash?

I will have a look on money saving expert. Thank you for suggesting 😊