The introduction of the Help to Buy Individual Savings Account (ISA) will be a boost for those saving for a deposit to buy their first home. First-time buyers saving up to £200 a month towards their first home with a Help to Buy ISA will receive an additional 25% from the Government. That’s a £50 bonus for every £200 they save, up to a maximum bonus of £3,000.
NEW HELP TO BUY ISAS will be available for four years, but once an account has been opened, there’s no limit on how long someone can save for.
Accounts will be available from autumn 2015 and an initial deposit of £1,000 will be required on opening the account – in addition to normal monthly savings. There is no minimum monthly deposit, but the maximum monthly amount is subject to £200 a month.
The bonus is only available to first-time buyers purchasing UK properties. There will be a minimum bonus size of £400 per person, and this is available on home purchases of up to £450,000 in London and up to £250,000 outside London. The bonus will be paid on the purchase of the person’s first home, and if an amount of £12,000 is saved, the Government bonus will boost total savings to £15,000.
Savers can only save into one Cash ISA per year, as are the rules now. This means it will not be possible for a saver to subscribe to a Help to Buy ISA and another Cash ISA with another provider.
The Chancellor, Mr Osborne, said: ‘It is as simple as this: we will work hand in hand to help you buy your first home. This is a Budget that works for you.’
Help to Buy ISAs will only be available to individuals who are 16 and over and will be limited to one per person. If appropriate, consider buying together to receive a bonus each.