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Lifetime ISA

The Lifetime ISA vs Help to Buy ISA

Could you buy your first home sooner by transferring to our Lifetime ISA?
Important information - please remember that the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. If you are unsure of the suitability of your investment please seek advice. Tax rules can change and the value of any benefits depends on individual circumstances. Investing should be considered over the long-term. Money in a Lifetime ISA can be withdrawn to purchase a first home or at age 60. Early withdrawals will usually be subject to a 25% penalty. If you are transferring, please ensure you won't incur excessive exit fees.

Transferring a Help to Buy ISA to a Lifetime ISA could mean a bigger government bonus and greater flexibility when saving for your first home. Remember, a Lifetime ISA must be opened for at least 12 months to benefit from the government bonus.

Lifetime ISA Help to Buy ISA
How much can you save each year? £4,000 £2,400 (£3,400 in the first year)
Can you invest lump sums? Yes No – monthly payments only (£200 maximum per month). an additional payment of £1,000 can be made in the first month
What is the maximum bonus? £32,000* £3,000
When do I receive the government bonus? Annually for 2017/18 tax year and monthly from 2018/19 When buying your first home
Can I earn interest on, or invest the government bonus? Yes. You can invest or earn interest on the government bonus as soon as it has been paid in to your Lifetime ISA No. The bonus is paid to your conveyancer when you buy your first home
When can I use the money to buy
a house?
After 12 months After £1,600 has been saved
Who can open the account? 18-39 year olds First-time buyers aged over 16
What’s the maximum property value allowed? £450,000 £250,000 (£450,000 in London)
Can I withdraw the money for any reason other than buying my first home? You can withdraw your money tax free after your 60th birthday. From 6 April 2018, withdrawals made before you are 60 which are not for the purchase of a first home will usually incur a 25% government withdrawal charge You can withdraw your money at any time but won't receive the government bonus on monies you withdraw

*Based on using your full allowance between the ages of 18 and 50 (£1,000 bonus each year). You can also earn a bonus on amounts transferred from a Help to Buy ISA to a Lifetime ISA in the 2017/18 tax year.

Why choose Hargreaves Lansdown?

  • Peace of mind – choose the UK’s leading investment platform, already trusted by over 876,000 clients with £70 billion
  • Expert guidance – see the latest research and investment ideas from our experts to help you choose from a range of investments. Please remember investments can fall in value as well as rise, so you could get back less than you invest.
  • Easy to manage – keep up-to-date with your investments online or using our new app for mobile
  • Great value – no set-up or transfer-in charges, no charges for buying or selling funds, low-cost reinvestment service and an annual fee of just 0.45% or less. See our charges.

What do I need to know before I transfer?

  • You can transfer from your Help to Buy ISA as valued at 5 April 2017 (plus any interest due for the period) to the Lifetime ISA in the 2017/18 tax year
  • This first transfer will not count towards your Lifetime ISA allowance and you will receive the 25% government bonus on the value of the transfer at the end of the first year (see example).
  • If you use the Lifetime ISA to purchase a property within the first 12 months you will not receive the government bonus.
  • Any further transfers from a Help to Buy ISA will receive the government bonus but will count towards your Lifetime ISA allowance.
  • If you choose to invest following your transfer, please note that investments don’t offer the same security as cash and can fall in value so you could get back less than you invest.

Transfer your Help to Buy ISA in two easy steps

Please read the Key Features, Terms & Conditions (including tariff of charges) and Important Investment Notes. Before transferring, please ensure you won't incur excessive exit fees.

  1. Download and complete our Lifetime ISA transfer form
  2. Return the form to Freepost HARGREAVES LANSDOWN.

We’ll do the rest and let you know once the transfer completes.

Download your transfer form

Tom has a Help to Buy ISA which is valued at £3,000 on 5 April 2017. He transfers his Help to Buy ISA on 6 April 2017 (2017/18 tax year) and qualifies for the 25% government bonus (£750). Tom can also contribute up to the Lifetime ISA allowance (£4,000) for the 2017/18 tax year and receive the government bonus for this too, resulting in up to £8,750 being paid into his Lifetime ISA in respect of the 2017/18 tax year.