32. Help to Buy ISA

The Help to Buy ISA is a government-backed savings scheme designed to help first-time buyers in the UK save for a deposit on their first home. Introduced in December 2015, the scheme incentivises saving by providing a government bonus based on the amount saved. 

How does the Help to Buy ISA work? 


Opening an account 
  • Eligibility: To open a Help to Buy ISA, you must be a first-time buyer, which means you have never owned a property anywhere in the world. You also need to be 16 years old or over and a UK resident. 
  • Providers: Help to Buy ISAs are available from a range of banks, building societies, and credit unions. You can shop around to find the best interest rates and terms that suit your needs. 

Saving money 
  • Initial deposit: When you open your Help to Buy ISA, you can deposit an initial amount of up to £1,200. 
  • Monthly contributions: After the initial deposit, you can save up to £200 per month. If you don’t save the full £200 in a given month, you cannot roll over the unused allowance to the next month. 

Government bonus 
  • Bonus calculation: The government will provide a 25% bonus on your savings when you use the ISA to purchase your first home. For example, for every £200 you save, the government adds £50. 
  • Maximum bonus: The maximum government bonus you can receive is £3,000. To receive this maximum bonus, you would need to save £12,000. 
  • Minimum bonus: The minimum amount you need to save to qualify for the government bonus is £1,600, which provides a bonus of £400. 

Using the ISA for property purchase 


  • Eligible properties: The Help to Buy ISA can be used to purchase properties up to £250,000 outside London, and up to £450,000 within London. 
  • Claiming the bonus: When you are ready to buy your first home, your solicitor or conveyancer will apply for the government bonus on your behalf. The bonus is added to your savings and used as part of the deposit for your home purchase. 
  • Restrictions: The ISA must be used for the purchase of a home you intend to live in. It cannot be used for investment properties or for properties you plan to rent out. 

Important considerations 


  • Deadline for new accounts: New Help to Buy ISAs could only be opened until 30 November 2019. If you already have an account, you can continue to save and claim the bonus until 30 November 2029. 
  • Transfers: If you have a Help to Buy ISA and want to transfer it to another provider, you can do so without losing your accrued benefits, as long as the new provider offers the Help to Buy ISA scheme. 

The Help to Buy ISA is a beneficial tool for first-time buyers looking to save for a home deposit, with the added advantage of a 25% government bonus on savings. Understanding the terms and conditions, including contribution limits and property eligibility criteria, is essential for maximising the benefits of the scheme. If you have an existing Help to Buy ISA, make sure to continue saving and plan your home purchase before the final bonus claim date in November 2029. 

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