ISA issues

[gman88667733]

I opened a standard savings ISA a couple of years ago now and regularly pay into it. I have just opened a Help to Buy ISA at the start of this financial year. I have tried to pay into both accounts, but it says that I have subscribed to more than one ISA in this financial year and it will now not let me pay into my help to buy ISA.

I believe it says on the Barclay's website (my bank) that you can pay into more than one ISA per year, as long as you have only opened a maximum of one in that year. So in theory, I should be able to pay into both my normal ISA and also the help to buy ISA. The mobile banking app will not let me.

Is this correct? Do I need to make an appointment with them and see if there is some sort of error? I am keen to pay to £200 a month limit on the help to buy ISA so that it builds up as much as possible so that I get a decent 25% bonus when the time comes to buy a house.

Cheers

[sas62]

An HTB cash ISA is just classed as a cash ISA and you can only pay into one in any tax year.

So if you pay into an HTB ISA in any tax year you can't put the rest of the allowance into another cash ISA.

You can however put it into a Stocks & Shares ISA.

So you could contribute to an HTB and a S&S ISA in one year.

This is my understanding.

[gman88667733]

So what can I do? I wanted to prioritize my H2B ISA as that'll give me the most when I come to buy a house. Or am I forced to wait until next April now that I've paid into my cash ISA this year? If so, that is very frustrating.

[sas62]

gman88667733 said:

So what can I do? I wanted to prioritize my H2B ISA as that'll give me the most when I come to buy a house. Or am I forced to wait until next April now that I've paid into my cash ISA this year? If so, that is very frustrating.

For a cash ISA I think you'll need to wait till April 2020.

You could open a S&S ISA and chose the safest most cash-like fund as an investment.

Or just put it in a high interest account as it won't generate interest above the personal savings allowance.

I'm sorry I don't know any other options but other may.

[Foliage]

I paid into a cash isa and a save to buy isa no problem last year, I had your concern but spoke to my bank who said that as long as they isa's were both with them it wasn't a problem as to the FSA it was classed as one isa and my intent was clear as long as I didn't go over the £20,000 threshold with both account combined.

I was transferring money from the cash isa to the help to buy isa.

I was intending to transfer the cash isa to a savings account then onto a help to buy isa, but I didn't need too in the end.

[gman88667733]

The problem is, the mobile app will not physically let me put the money from my cash ISA or my current account into the H2B ISA, it gives me an error message saying i've subscribed to an ISA for this financial year already?

Perhaps I need to give Barclay's a call...

[sas62]

Foliage said:

I paid into a cash isa and a save to buy isa no problem last year, I had your concern but spoke to my bank who said that as long as they isa's were both with them it wasn't a problem as to the FSA it was classed as one isa and my intent was clear as long as I didn't go over the £20,000 threshold with both account combined.

I was transferring money from the cash isa to the help to buy isa.

I was intending to transfer the cash isa to a savings account then onto a help to buy isa, but I didn't need too in the end.

According to the official site you CANNOT contribute to a Cash ISA along with an HTB ISA and it list these as products you CAN contribute to with a HTB ISA - "either a stocks and shares ISA, an Innovative Finance ISA, Lifetime ISA or a non-ISA account"

However it does say "some ISA managers offer portfolio ISAs which allow you to hold multiple ISA products within a cash ISA wrapper"

Sounds like this may be what you had?

Here is the official site FAQ

https://www.helptobuy.gov.uk/help-to-buy-isa/faq/

[Foliage]

sas62 said:

According to the official site you CANNOT contribute to a Cash ISA along with an HTB ISA and it list these as products you CAN contribute to with a HTB ISA - "either a stocks and shares ISA, an Innovative Finance ISA, Lifetime ISA or a non-ISA account"

However it does say "some ISA managers offer portfolio ISAs which allow you to hold multiple ISA products within a cash ISA wrapper"

Sounds like this may be what you had?

Here is the official site FAQ

https://www.helptobuy.gov.uk/help-to-buy-isa/faq/

A Help to buy isa is just a cash isa, so yeah probably this. OP needs to call his bank. I had some problems with the banking app when I did it with nationwide, but it was fixed extremely quickly, maybe the person I spoke to just wrapped them.

[Integroo]

Open a LISA, not a H2B ISA. If you are definitely going to use the funds to buy a house, it is better than the H2B as you can contribute more a year and don't have to drip-feed monthly.

[gman88667733]

But a house purchase is probably 6 years away currently as I am still very young, so surely getting the 25% bonus on up to £12k is worth having with the H2B? That's £3k for free...

[sas62]

gman88667733 said:

But a house purchase is probably 6 years away currently as I am still very young, so surely getting the 25% bonus on up to £12k is worth having with the H2B? That's £3k for free...

With a Lifetime ISA you can put in £4000 per year and have an additional £1000 added for free. (If you don't use the money for house purchase then they claw back the 25% when you withdraw)

Over 6 years that's 6k for free.

As far as I know you can have a Lifetime ISA and a cash ISA contribution in one year.(4k max into LISA and 16k into Cash ISA)

https://www.gov.uk/lifetime-isa

Be careful though as you only get the tax free bonus on either HTB or Lifetime ISA not both.

[Integroo]

gman88667733 said:

But a house purchase is probably 6 years away currently as I am still very young, so surely getting the 25% bonus on up to £12k is worth having with the H2B? That's £3k for free...

You get the 25% with a LISA and can put more in a year (4k). Only downside is a 6.25% effective penalty if you withdraw for any other reason than buying a house or keeping till retirement.