Government to Adjust ISA Savings Rules: New Limits for First-Time Buyers
The UK government is set to modify ISA savings rules next year, affecting first-time buyers. The annual allowance remains at £20,000, but savers can only direct £12,000 freely into cash ISAs. The remaining £8,000 must go into investment ISAs. Those aged 65 and older are exempt from this restriction.
This change follows questions from Labour MP Gill Furniss about easing Help to Buy ISA limits. Currently, these funds cover homes up to £250,000 outside London or £450,000 inside. No new accounts can open, but existing savers keep benefits like monthly deposits of £200 and a 25% government bonus up to £3,000.
Treasury minister Lucy Rigby assures the governments focus on first-time buyers by building 1.5 million new homes. They review savings policies ahead of fiscal events but have not announced specific changes yet.
First-time buyers can also consider Lifetime ISAs, allowing savers aged 18-39 to add up to £4,000 yearly until age 50, with an instant 25% bonus worth up to £1,000. Funds can be used for first homes up to £450,000 or at age 60, with penalties for other withdrawals.
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