Don’t miss out on the chance of a Help to Buy Isa

THERE are just under three months left for first-time buyers to get financial support worth thousands of pounds from the Government-backed Help to Buy Isa.

Buyers who failed to take up the option last year missed out on £388million in free bonuses according to analysis by specialist lender Aldermore.

The bank’s research also shows that a quarter of first-timers save for a deposit in a current account, rather than a Help to Buy Isa. The Isa gives a 25 per cent boost to people saving for their first home when they buy a property worth up to £250,000 – or £450,000 in London.

For every £200 saved, the Government adds £50 – up to a maximum £3,000 a year. But accounts will no longer be available from this December. Ewan Edwards, head of savings at Aldermore, says: ‘Some first-time buyers are passing up the gift of free Government money.’

He warns that people who are not planning to buy this year but have the intention to do so in the future will still have the opportunity to use a Help to Buy Isa for the next ten years if they open an account now, with monthly deposits accepted until December 2029. The bonus can be claimed up until December 2030. Buyers can get the wheels in motion now by opening the account with just £1.

According to research by Aldermore, more than a fifth of buyers don’t know where to get such an Isa from even though they are available from banks and building societies. More than half of people also did not realise buyers can have a Help to Buy Isa as well as a cash Isa, subject to an overall annual limit of £20,000. Nearly half did not know couples can have an account each, provided both are first-time buyers.

There are drawbacks. Hayley Millhouse, of financial advice service OpenMoney, says: ‘Savings can be slow to accumulate, so it may take years to be in a position to buy your first property.’

For more details visit helptobuy. gov.uk/help-to-buy-isa.