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Help to Buy ISAs: Are they as good as they sound?

For first-time buyers who are saving toward a deposit, opening a Help to Buy ISA really is a no-brainer. Offering a 25% bonus of the total you have saved, in addition to interest accrued, there is no other savings account that can get close to these returns.

For many first-time buyers, saving for a deposit represents the biggest hurdle between them and getting on the property ladder. For this reason, the Help to Buy ISA will be music to many people’s ears.

The government backed scheme means that for every £1,000 you save, the government will credit you with an additional £250. This type of return is streets ahead of traditional savings platforms and is why over 1 million people have opened accounts since their inception.

If you want to reap the rewards of this scheme you will need to act fast;
the deadline to open a Help to Buy ISA account is 30th November 2019.

The account allows for regular saving; the first instalment can be of up to £1,200, with a maximum of £200 able to be deposited in each month thereafter. Whilst there is no limit on the amount that can be saved into a Help to Buy ISA, the bonus is capped at a maximum of £3,000. In other words, you will attract the 25% bonus on the first £12,000 of savings only. Given the monthly caps on deposits, it would take just over four and half years to qualify for the maximum bonus so opening an account early is essential to fully make use of the scheme.

The accounts are available to anyone aged 16+ and can be used to buy a property of up to £250,000 (£450,000 in London). If you are looking to buy with a partner or friend, you can each open an account meaning your bonus could total £6,000.  Although the accounts are designed for longer term saving, the bonus can be applied to as little as £1,600 meaning it is still worthwhile opening an account, even if you are as little as three months away from purchasing.

What are the alternatives?

In some circumstances, a Help to Buy ISA may not be the best fit; perhaps you wish to buy a property in excess of the threshold or you wish to deposit more than the ISA allows.

Whilst the Help to Buy ISA has had much press, the Lifetime ISA (LISA) has flown largely below the radar. One of the reasons for this is the lack of availability; to date, only a handful of providers offer the LISA. Another is its name; the Lifetime ISA is predominantly thought of as product for retirement planning.

Lifetime ISA (LISA)

Sure enough, a LISA has many benefits for retirement planning, but it can also benefit first time buyers in much the same way as a Help to Buy ISA, with some key differences.

With a LISA, you are not capped at £200 per month and you can pay in anything up to £4,000 per financial year, in a lump sum or regular instalments. This could suit you if you already hold savings as you can invest much more quickly. With the end of the tax year just a few days away, you could make a £4,000 deposit now (before 5th April 2019) and then invest a further £4,000 as soon as 6th April 2019.

Upon withdrawal, the LISA will also qualify for the 25% bonus, providing the account has been open for at least 12 months. The £4,000 yearly limit means a potential bonus of £1,000 per year with essentially no cap on the maximum bonus allowed (the bonus is capped at £33,000 meaning you would have to have the account for more than 33 years to hit the limit).

The LISA also allows for a higher purchase price outside of London with a £450,000 limit applicable anywhere in the country.

There are many factors that will determine which type of account is right for you. The table below highlights some of the main features and differences of each:

Help to Buy ISA vs Lifetime ISA

  Help to Buy ISA Lifetime ISA
Opening ageAnyone aged 16+ Anyone aged 18-39
Maximum contribution£200 per month (£1,200 in the first month) £4,000 per tax year  
Maximum property value£450,000 £250,000 (£450,000 in London)  
Maximum bonus£3,000 £33,000
Penalty if you don’t buy a house None
(You just don’t get the bonus) 		Yes, unless you leave it until you are aged 60+    
How long before the account qualifies for bonus Once you have saved £1600 (minimum 3 months) 12 months from opening the account
When is the bonus paidOn completion On exchange  

Should you have any questions, or need help deciding if a Help to Buy ISA is best for you, please contact one of Temple Wealth’s advisers. We can advise you on all aspects of the house buying process – from beginning to save for your deposit to finally buying a house and getting the right mortgage for you.

Call 01329 282882 or use the form on our Contact Us page.


The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

Your home maybe repossessed if you do not keep up repayment on your mortgage.

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Planning for the end of the 2019 tax year

With the help of a financial adviser and some simple financial planning ahead of the tax year-end (5th April 2019) you can make the most of the tax allowances available to you such as your ISA and pension Annual Allowance.

ISA allowance

You have a £20,000 ISA allowance each tax year. This is a ‘use it or lose it’ allowance as it cannot be carried forward if it is not fully utilised. This allowance will remain at the same level in the 2019/2020 tax year.

There are 4 types of ISA and you can put money into one of each kind of ISA each tax year:

  • Cash ISAs
  • Stocks and Shares ISAs
  • Innovative Finance ISAs
  • Lifetime ISAs

An ISA such as the Help to Buy ISA can be beneficial if you are saving to buy your first home. First time buyers get a 25% bonus from the Government on savings in a Help-to-buy ISA. The maximum bonus you can receive is £3,000 (if £12,000 has been saved). The deadline for opening a new Help to buy ISA is 30th November 2019.

With a Junior ISA,a UK child under 18 can currently save up to £4,260 in one tax year.

A financial adviser will be able to help you find the type of ISA most suitable for you and your investment goals.

Pension Annual Allowance

UK individuals can ‘normally’ contribute up to £40,000 gross, or up to their annual gross income, per tax year into a pension scheme. This allowance will remain at the same level in the 2019/2020 tax year.

Funds are tax efficient within a pension although the Lifetime Allowance (currently £1,030,000) limits the total amount you can accrue in a pension pot without an additional tax charge. 

You can take a look at our previous blog to find out if you are making enough pension contributions.

The Annual Allowance can be carried forward, subject to a few rules. If you have been a member of a pension scheme but have not fully utilised your Annual Allowance for the previous three tax years, you could be able to carry this forward to make a larger contribution in the current tax year.

Tapered Annual Allowance – this is when the Annual Allowance is reduced by £1 for every £2 of ‘adjusted income’ over £150,000. It can affect you if your income from all sources is over £110,000.

Inheritance Tax

The Inheritance Tax (IHT) nil rate band is currently frozen at £325,000 until 5th April 2021.

Inheritance tax planning can enable you to utilise the available exemptions including:

  • Annual Exemption – up to £3,000 can be given away each tax year and unused amounts can be carried forward and utilised in the next tax year.
  • Small Gifts Exemption – up to £250 can be gifted to as many people as you wish each tax year.
  • Gifts out of Income – you can gift regular disposable income if your income often exceeds your expenditure.
  • IHT efficient investments can benefit from business property relief and are then IHT exempt after being owned for two years. These investments can be high risk and financial advice should be sought.

Capital Gains Tax 

The annual exemption for the current tax year is £11,700. This is also an allowance that cannot be carried forward if it is not fully utilised. Unused losses are carried forward and can be offset against future gains.

2019/2020 tax year – changes to some of these allowances

Minimum/Living Wage

After 6th April 2019, the minimum wage for 18-20 year olds will increase from £5.90 to £6.15 per hour. For 21-24 year olds it will increase from £7.38 to £7.70 and for anyone aged 25+ it will increase from £7.83 to £8.21 per hour.

Personal Allowance

This will increase from £11,850 to £12,500 in the 2019/2020 tax year.

Lifetime allowance

This will increase from £1,030,000 to £1,055,000 in the 2019/2020 tax year.

CGT Annual Exemption

This will increase from £11,700 to £12,000 in the 2019/2020 tax year.

One of our independent financial advisers at Temple Wealth Management can advise you on how best to plan for the end of the tax year, as well as how to fully utilise your available allowances in the new tax year.

To discuss your end of tax year planning needs, contact one of our advisers on 01329 282882 or use our website contact form.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor. The Financial Conduct Authority does not regulate Tax Advice.

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The importance of reviewing your personal finances, whatever your age

Setting goals for your personal finances is crucial to success and achieving your financial objectives.

What does it mean for your age group?

From your first job until your 30s, these are known as “the vulnerable years” as you are trying to build up your personal finances to secure your future, protecting your income and saving for the future.  You may have a specific financial objective such as buying your first car, saving a deposit for your first house or for even retirement.  This means being aware that, however small, the earlier you start the better the result.

Then you move to your 40s, when you may own your own home, have a family.  Your objectives will change towards protecting a higher level of income, whilst also protecting your family and lifestyle.  Retirement starts to be foremost in your planning in order to ensure financial security. It is important to consider making the most of your tax allowances for the future. 

In the years up until retirement, which could be any age from 55 upwards to around 70 you will begin to see the benefit of planning your personal finances from an early age.  You will be looking at making retirement work for you.  These are the years that you will start to think about your children and grandchildren and their financial security, maybe preparing the “bank of Mum and Dad”.  Health will start to play a part in your future financial planning.  An Independent Financial Adviser can help you assess if your personal finances are on track to achieve your goals.  

From your 70s and through retirement, your personal finances may mean that long term care becomes more of a consideration.   This can also include succession planning in terms of inheritance tax, Power of Attorney and ensuring your will is up to date.

There will be other areas of planning that will be unique to your situation and therefore the earlier you engage with planning your personal finances the better.  It does not matter if you think you have no money to consider these things; if you start planning early and engaging the easier it will be in the future.  An Independent Financial Adviser can help at any stage of planning.

Temple Wealth Management – Your Financial Partner for Life.

We believe that professional financial advice can add significant value to individuals at any stage of life whether this be ensuring you have a competitive mortgage rate; reviewing your protection needs in case the worst were to happen. 

Temple Wealth Management can help find the right solution to make your savings work better for you and guide you through retirement planning.

Contact TWM on 01329 282882 or fareham@templewealth.co.uk to find out how one of our advisers can help you

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Risk Profile And Your Capacity For Loss – Adventurous Or Cautious?

risk profile capacity loss

How you invest your money can have a dramatic effect on the return you receive.

We all know that investment stocks can go up as well as down but how do you know how much risk you should take with your money? Understanding your attitude to risk and completing a risk profile can relieve some of the worries of investing.

There is no right or wrong answer here; it is personal to you and your situation. This may change over time, as your family grows or you get closer to retirement. Therefore it is important to regularly assess your attitude to risk and ensure your money is invested wisely.
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