The Help to Buy ISA was a savings account specifically designed to help first-time buyers save for a house deposit, with the government adding a 25% bonus on top of your savings. It closed to new applicants on 30 November 2019, so you cannot open one today.
If you already have a Help to Buy ISA, it’s worth understanding how the bonus works, when you can claim it, and how to make the most of what remains.
What Is the Help to Buy ISA?
The Help to Buy ISA allowed first-time buyers to save up to £200 per month (plus an initial lump sum of up to £1,000 in the first month). For every £200 saved, the government added £50 — a 25% bonus on contributions, up to a maximum bonus of £3,000 (on £12,000 of savings).
Key features:
– Government bonus of 25% on savings, minimum bonus £400 (on £1,600 saved), maximum £3,000
– Savings earn interest from the bank
– Can only be used toward purchasing a qualifying first home
– The home must cost £250,000 or less (£450,000 in London)
Can I Still Open One?
No. The scheme closed to new applicants on 30 November 2019. Banks and building societies stopped accepting new Help to Buy ISA applications on that date.
If you didn’t open one before the deadline, the closest equivalent for first-time buyers is the Lifetime ISA (LISA), which offers a similar 25% government bonus but on contributions up to £4,000 per year (versus £2,400 per year for the Help to Buy ISA at maximum contributions). The LISA can be opened by anyone aged 18–39.
If You Already Have a Help to Buy ISA: What to Do
You can still contribute until 30 November 2029. Existing accounts remain open, and you can continue saving up to £200 per month. The interest on your balance is paid by your bank or building society.
You must claim the bonus within the scheme. You have until 1 December 2030 to claim the government bonus on your savings.
The bonus is paid at completion of a property purchase — not when you exchange contracts. Your solicitor or conveyancer claims it through a government portal and applies it to the purchase.
How to Claim the Help to Buy ISA Bonus
- When you’re ready to buy, ask your solicitor or conveyancer that you have a Help to Buy ISA and want to use the bonus
- Your solicitor requests a closing letter from your bank, which shows the balance in your ISA
- The solicitor applies to HMRC’s Help to Buy ISA bonus payment system
- The bonus is paid to your conveyancer at completion and applied to the purchase price
Important: The bonus cannot be used as part of the exchange deposit (usually 5–10% paid when contracts are exchanged). It’s only available at completion. If your solicitor requires the full deposit amount at exchange, you need to have that available without the bonus.
Help to Buy ISA vs Lifetime ISA
If you have a Help to Buy ISA and are comparing it to a LISA for future saving:
| Help to Buy ISA | Lifetime ISA | |
|---|---|---|
| Closed to new applicants | Yes (Nov 2019) | No (open to 18–39 year olds) |
| Annual contribution limit | £2,400 (£200/month) | £4,000 |
| Government bonus | 25% of savings | 25% of contributions |
| Max bonus | £3,000 | £1,000/year (no overall cap) |
| Property price limit | £250,000 (£450,000 in London) | £450,000 |
| Minimum account open | None specified for bonus | 12 months before use |
| Withdrawal penalty | No bonus if not used for property | 25% on all withdrawals (not for property or retirement) |
Can you have both? You can hold both a Help to Buy ISA and a LISA, but you can only use the government bonus from one of them toward a property purchase — you must choose at the point of buying.
If you have both, compare: the LISA bonus on the full £4,000/year contribution (£1,000 bonus) typically exceeds the Help to Buy ISA annual max bonus (£600) — so continuing to contribute to both but using the LISA bonus for the purchase is often the better strategy, if the property is below £450,000 and you opened the LISA at least 12 months before purchase.
Should You Withdraw from Your Help to Buy ISA?
No — if you plan to use it for a property purchase within the scheme window (before November 2030). The 25% government bonus makes this a uniquely high-return savings account. Withdrawing without buying (i.e., for non-property purposes) forfeits the bonus entitlement on that money.
If you’ve decided you won’t buy a home and won’t use the ISA for property, you can withdraw the savings and interest but lose the bonus entitlement.
Summary
The Help to Buy ISA is closed to new applicants, but existing account holders have time to use what they have:
- You cannot open a Help to Buy ISA — the scheme closed November 2019; look at the Lifetime ISA instead
- If you have one, keep contributing — up to £200/month until November 2029
- The bonus is claimed at completion — your solicitor handles this; you don’t receive it in advance
- The bonus can’t be used at exchange — you need your exchange deposit from other funds
- If you have both a LISA and Help to Buy ISA, use the LISA bonus for the purchase (higher annual bonus, higher property price limit)
Next read: What is a Lifetime ISA and who should open one? | https://moneyunpacked.com/what-is-a-lifetime-isa-and-who-should-open-one/