Help to Buy ISA available from December
The recent Summer Budget brought with it confirmation that the new 'Help to Buy ISA' will be available from December this year.
Hopefully all banks and building societies will play ball by not only offering a Help to Buy ISA, but paying a decent rate of interest as well. It will be disappointing if all providers don’t get on board, as the more providers who are vying for the money, the more competition there is likely to be. And this will lead to better rates?
As the amount that can be saved is capped at a relatively low level, which is usual practice with regular savings accounts, hopefully we’ll see some rates that look highly competitive. Those providers who want to sell mortgages may be more competitive than others. Also it’s possible that we could see some Help to Buy ISAs linked to current accounts, especially with the High Street providers, as is the case with many of the best paying regular savings accounts at the moment. But we have to wait and see.
Some of the Challenger Banks who traditionally have not offered ISAs, may take the opportunity to expand on their savings offerings – and these are the providers who have really been driving the competition in the savings market recently.
With the positive movements that have been occurring in the savings market recently, it would be good to think that the introduction of the Help to Buy ISA will stimulate a small ISA battle, but some providers may wait until the new tax year. This would be a welcome change after the appalling ISA seasons that we have seen recently.
It’s important however to understand that you cannot open a Help to Buy ISA before 6th April 2016, if you have already contributed into another cash ISA in the current tax year.