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I am looking to move out in the next coming years, whether that is just to a flat some where or a full house is not decided yet.

After talking to a work colleague who is currently trying to buy a house he explained to me the "Help to buy" scheme that the UK government set up where you set up a savings account and pay £200 a month into it to get a 25% interest rate on that £200 you put each month, on top of the standard interest rate for the account. He also told me that they no longer do these accounts.

My question is, Is there a replacement for this scheme or anything that maybe government fund that is less known about to help young people get on the housing market? If not will i just have to shop around to find the best savings account that will give me the best interest rates?

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The main replacement is a Lifetime ISA.

You can open one from 6th April 2017 if you're under 40 at the time, and can then save into them until age 50. You get a 25% bonus up to £1,000 per year (i.e. for £4,000 saved), and can withdraw the money penalty free to buy a house worth less than £450,000, or after the age of 60.

If you withdraw under other conditions, then you lose the 25% bonus (plus any growth) and pay a 5% penalty.

  • I thought you can withdraw when you're 55, are you sure it's 60? – SMeznaric Mar 19 '17 at 13:16
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    @SMeznaric fairly sure, that's what all the search results say too. Are you thinking of pensions? Those are 55 now, rising to 57 in future (i.e. for people who are younger now). – GS - Apologise to Monica Mar 19 '17 at 14:25
  • You're right, I was thinking of pensions. – SMeznaric Mar 19 '17 at 14:50
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This gimmick has been replaced by a slightly less generous gimmick: https://www.helptobuy.gov.uk/help-to-buy-isa/how-does-it-work/

The new help to buy ISA gives you a 25% topup up to £3000, but this money can't be used directly for your deposit, just for reducing the overall LTV.

There are various other schemes available: http://www.zoopla.co.uk/discover/first-time-buyers/first-time-buyer-government-scheme

Savings accounts have fairly terrible interest rates at the moment. Personally I think the best option would be a stocks and shares ISA, although the value of your investment can go down as well as up.

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