Help to Buy Isa helps almost one million people

Help to Buy Isa helps almost one million people

The Help to Buy Isa has now helped almost a million people save towards their own home, the Department for Communities and Local Government has revealed.

Figures published today (22 June) show 960,000 people benefitted from the saving scheme between the scheme's launch on 1 December 2015 and 31 March 2017.

Some 62,528 property completions have been supported by the Isa, with the highest number - 7,156 – in March this year.

Article continues after advert

In addition, 86,128 bonuses have been paid, with an average value of £625 and a total value of £54m.

The mean value of a property purchased through the scheme is £170,464, compared to an average first-time buyer house price of £182,000 and a national average house price of £216,000.

The Help to Buy Isa enables people saving for their first home to receive a 25 per cent boost to their savings from the government when they buy a property of £250,000 or less - with a higher price limit of £450,000 in London.

In April this year the government introduced the Lifetime Isa, which is aimed at helping people under the age of 40 buy their first home or save for retirement.

Danny Cox, chartered financial planner at Hargreaves Lansdown, said: “Help to Buy is proving to be a popular warm-up act for the Lifetime Isa, reducing the time it takes for first-time buyers to take that all important step onto the property ladder. 

“Transferring a Help to Buy Isa to a Lifetime Isa makes sense for all but those who are planning to buy over the next 12 months, as the Lifetime Isa has higher contribution limits and for those who have time on their side, offers the option to invest to beat cash returns.”

A study revealed last month that four in 10 people investing in the new Lisa plan to stop or cut their pension contributions.

According to a survey by CoreData, 34 per cent of those planning to invest in the Lisa will cut the amount of money they put into their pension, while 7 per cent will stop saving into it altogether.

The findings will prompt growing concerns that the Lisa could be the next mis-selling scandal on the horizon - as predicted by Ros Altmann, former pensions minister, last September.

She warned the Lifetime Isa isn’t even close to being as beneficial as a pension post retirement freedoms.

Baroness Altmann said: “In my view Lifetime Isas risk poorer pensioners in the future and it is a disaster in the making."