Help to Buy Isas: round up of the deals available

You can get up to 4 per cent with one bank, while others are offering different deals

Simon Read
Personal Finance Editor
Tuesday 01 December 2015 19:56
Free cash from the government for first-time buyers
Free cash from the government for first-time buyers

Fresh help for first-time buyers comes in the form of the new Help to Buy Isa, which are now officially available, You can start one of the tax-free savings schemes with £1,000 and then save £200 a month towards a deposit and eventually earn a government bonus of 25 per cent of the amount you save, up to a maximum £3,000.

Not all savings providers are offering the new schemes yet but the likes of Nationwide, NatWest, Lloyds, HSBC and Aldermore have launched Help to Buy Isas paying 2 per cent. But Virgin Money is paying 3 per cent and Halifax has topped the lot with a more generous 4 per cent.

“Halifax’s deal looks highly enticing when compared with the average easy-access Isa, which pays just 1.09 per cent,” said Charlotte Nelson of Moneyfacts. The last time there was an easy-access Isa paying 4 per cent was back in January 2009.

Meanwhile Santander is targeting existing customers by offering a 2 per cent rate to 123 World and Select users, but just 1.5 per cent to other customers. Barclays said its deal paying 2.25 per cent will be available from 17 December in branches.

Some are much less generous. Newcastle building society’s pays just 1.5 per cent and that includes a 1 per cent bonus. At Yorkshire and Clydesdale Banks the rate is just a relatively paltry 0.7 per cent.

Other Help to Buy Isas have additional attractions. Nationwide is allowing Help to Buy Isa savers to spread their Isa balance across other Isas so people can use their full £15,240 tax-free allowance.

Meanwhile Aldermore said customers who already have a cash Isa with it for the 2015-16 tax year can also open a Help to Buy Isa, as long as they don’t exceed their annual £15,240 limit.

Virgin Money is offering first-time buyers who want to save more each month than the Help to Buy Isa limit allows, a new Saving to Buy account, which pays 1.3 per cent, although that’s not tax-free.

The new tax-free savings schemes are available for individuals, which does allow couples to take advantage twice, saving up to £400 a month between them to gain a potential £6,000 from the Government.

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