ISA: Is it possible to use both Help to Buy and Lifetime ISA bonuses? Rules explained

Help to Buy ISAs were launched in 2015 and were designed to help people get on the property ladder and get on with paying a mortgage. Lifetime ISAs (LISA) were launched in 2017 to replace the help to buy scheme which is now closed to new savers.

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While both types of ISA have different rules, they both offer tax free bonuses.

Help to buy ISAs can provide a maximum bonus of £3,000 with no limitations on withdrawals.

LISAs, if given maximum contributions, can provide a bonus of £32,000 but there will be steep penalties to pay if early withdrawals are made.

LISA bonuses are paid on a weekly basis whereas Help to buy bonuses are only awarded when a home is being bought.

The bonuses themselves can only be used for house purchases.

LISA bonuses can be used for retirement funding if desired but it is primarily designed to support property purchases.

While it is no longer possible to open Help to Buy ISAs, some people may still hold accounts from before they were closed.

Currently, people can save money in both types of ISAs so long as they follow the necessary rules.

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However, it is not possible to use the bonuses from both accounts to buy a house.

The holder of the accounts will need to decide which of the two bonuses they’ll use for the house purchase.

Under the current rules, people can keep saving into Help to Buy ISAs until November 30 2029.

They will then only be able to use the bonus up until December 1 2030.

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Savers can place up to £20,000 a year across the different account types.

There are four types of ISA available: Cash, stocks and shares, innovative finance and Lifetime ISAs.

Money can be places into each kind of ISA in a tax year.

There are also junior ISAs which have a lower limit and can only be held for children.

To open an ISA, a person must be:

  • 16 or over for cash accounts
  • 18 or over for stocks and shares or innovative finance ISAs
  • 18 or over but under 40 for Lifetime ISAs
  • A resident in the UK
  • A Crown servant (for example diplomatic or overseas civil service) or their spouse or civil partner is if they do not live in the UK

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