HTB ISA vs LISA

For anyone who is not aware the 2019/2020 Financial Year ends on Sunday, 05 April, 2020 at 11:59pm.

The world is experiencing an epidemic at the moment and half of humans are under Lockdown; we are stuck at home. Here in the UK we are only allowed to go out for essential reasons only. Whilst I am stuck at home and enjoying (Introverts say HI), it dawned on me during a work telecon that most people haven’t made use of their allowance. I immediately got on my Canva app and created a post on Instagram. It wasn’t hard to get this done in 20mins max.

I digress, the post is shown below. Click on it for more information.

Total ISA Allowance for this financial year is £20,000. £6400 of this amount can be split between a HTB ISA and a LISA – you can only save into a HTBISA if you opened one before 31 Dec 2019. You can only claim the 25% government bonus on one of these and not both. Please refer to my post How to Invest in the Stock Market Part 2 for more information on ISAs.

Both the HTB ISA and the LISA can be used to purchase a property; unlike the former, the latter can also be used for retirement income. For a more detailed comparison between the two, click on the Download Button below:

HTB ISA v LISA Comparison Chart

The chart above focuses primarily on using these two options as part of your house deposit saving strategy.

For investment purposes, it is worth pointing out the following peculiarities of the LISA:

  1. You can open one if you are under 40 years old and resident in the UK. Check .gov.uk or HMRC website for  information.
  2. This can either be a Stocks and Shares LISA or a normal cash ISA. I decided to keep mine as a Cash ISA due to my short term plan for it. Saved me having to deal with any losses due to market crashes etc if invested in Stocks and Shares.
  3. Current rules say contributions can be made to it until age 50. So if you choose to use it for a house purchase, you can then convert to a Stocks and Shares option and continue contributions for retirement purpose

If you are under 40 and plan to buy a house, cultivate a general saving culture and/or learn to invest open a LISA before Sunday and deposit unused cash (NOTE: DO NOT TOUCH YOUR EMERGENCY SAVINGS).

2 thoughts on “HTB ISA vs LISA

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