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Want a Help to Buy ISA? Four things you must do NOW

The Help to Buy ISA was one of the big announcements in March’s Budget, promising a boost to first-time buyer deposits. But be careful - you could miss out if you pay into another ISA first.

Saving for a home can be a barrier for anyone wanting to start on the housing ladder. A new Help to Buy ISA (Individual Savings Account) will give a return of 25% on savings when put towards a house. There’s a cap on the total return (£3,000) and you can only pay in a maximum of £200 a month, but it’s some very useful free money to help you buy a home.

However, Help to Buy ISAs don’t launch until the autumn 2015, and that could cause problems for many with existing ISAs.

You can only pay into one Cash ISA every financial year, which runs from April 6 to April 5. As soon as you make a payment into one account, whether it’s new or one you’ve had for a while, you’ll be unable to contribute into a Help to Buy ISA until April 2016.

If you want to contribute into a Help to Buy ISA this year, follow these four simple steps.

1. Stop any standing orders to your existing ISA

Make sure you don’t transfer any money into an existing ISA after April 5. If you have a regular payment from your bank make sure this is stopped.

2. Don’t open a new ISA

Even if you’re not sure you will get a Help to Buy ISA, opening a normal ISA elsewhere after April 5 stops you from having a second when these new ones are available in the autumn.

3. Start saving your deposit

You can pay in £1,000 when you open the account, so start putting money aside now so you can put as much as you can in.

4. Get the best interest elsewhere

Don’t let that money just sit there on zero interest. There are some very competitive interest rates available from some current accounts.


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