Although it’s still early days, so far, just 14 providers have got on board to offer the first Help to Buy ISAs, a Government scheme that helps first time buyers get on the housing ladder, in the form of a bonus of up to £3,000.
First time buyers will be able to save up to £200 per calendar month into a Help to Buy ISA, which will be boosted by the government by 25%, so a bonus of £50 for every £200 saved, up to a maximum bonus of £3,000.
In the UK there is a huge emphasis on owning property, so Help to Buy ISAs are bound to be popular with anyone that has aspirations of home ownership. Although early signs have left us underwhelmed about the rates on offer, Halifax could well clean up with its market leading 4% rate – double what the majority are currently offering.
Having said this, the interest rate is really the icing on the cake. A generous 25% bonus is a great incentive for those who are struggling to find the money to save for a deposit.
While the Help to Buy ISA won’t help first time buyers to find the cash to save, the 25% bonus is a real incentive to help them put away as much as they can afford. It might be only £5 or £10 a month at the beginning, but knowing that every £1 will be boosted by 25p makes it far more compelling to tighten your belt and do what you can.
We have launched our new Help to Buy ISA Best Buy Table and have a FREE Factsheet to help support savers. You can also call one of our advisers on 0800 321 3581 for any help and questions you might have.