Help to Buy ISA

The Government has recently introduced a new scheme that will help first-time buyers get a step on the property ladder. The new Help to Buy ISA will be launched in autumn 2015 (exact dates to be confirmed) and offers savers a cash boost towards the cost of buying their first home.

If you or someone you know are considering saving into a Help to Buy ISA, here’s what you need to know:

How does the Help to Buy ISA work?

Save up to £200 per month and the Government will add a 25% bonus. It will also be possible to start the ISA off with an initial deposit up to £1,000, on top of which the Government will contribute 25% (£250 in this instance).

The scheme is open to first-time buyers and account holders must be over the age of 16. There is no income criteria so anyone can open a Help to Buy ISA providing they have never owned a house before.

Is there a minimum saving limit?

The minimum you need to save into the ISA is £1,600. The maximum contribution that the Government will make is £3,000 (on a £12,000 balance).

How can I open a Help to Buy ISA?

The new ISA will be made available through high-street banks and building societies, which will each set their own rates, as they do with normal cash ISAs. This means that you can also earn interest on your savings, as well as receiving the Government bonus.

You can only open one Help to Buy ISA, unlike a cash ISA which allows you to open one each tax year. You will, however, be allowed to continue saving into the ISA each tax year. You will also be permitted to transfer an existing Help to Buy ISA to a new provider, for example if interest rates drop with your current provider.

As the ‘one account’ rule applies per person, if you are a couple you could both open a Help to Buy ISA as individuals.

It’s important to note, you cannot save into a cash ISA and a Help to Buy ISA in the same tax year. So, if you’re thinking of opening a Help to Buy ISA when they are launched in the autumn, you would not be able to open a new cash ISA or deposit cash into an existing ISA after 6th April 2015.

When and how will I receive the bonus?

You will receive the bonus, in the form of a voucher that is sent directly to your mortgage lender, when you purchase your first home.

You will be able to use the voucher towards any residential mortgage deal, it does not necessarily have to be a Help to Buy mortgage.

Opening a Help to Buy ISA for your children

The minimum age for a Help to Buy ISA is 16 so you cannot open one for children under this age. If your child is over 16, you can encourage them to open one which you are then free to deposit cash into.

BLM Blogs are not meant, or designed, to offer personal advice; for advice in relation to your own situation, please contact us.

Is your money stuck in a Zombie Fund?

There has been much talk about so called ‘zombie funds’ of late, with the Financial Conduct Authority launching an enquiry into them as part of a wider enquiry into the possible mistreatment of longstanding customers.

The pension and investment policies under scrutiny date back to the 1980s and, although the FCAs enquiry is focused on the high penalty charges that some of these policies incur if the investor wishes to move their money, this is not the only reason why ‘zombie fund’ customers should be concerned, particularly as many will now be approaching retirement.

What is a Zombie Fund?

The terminology may mean different things to different people but the general ethos is that many funds have lost direction and focus with some charging high fees to stay in and high fees to get out. Commonly these funds will be closed to new business and with no new money going into them, one could be forgiven for thinking that the fund managers have little incentive to produce a good return for their investors.

Pension Review Service

If you have a pension, and have had it for some time:

  • Do you know what it is invested in?
  • Do you know how it is performing?
  • Is the fund still suitable and does it reflect your attitude to risk?
  • Are you paying high charges?
  • In the event of your death, will the right people inherit the pension fund?

Our pension review service will answer these questions for you.

An example where our Pension Review Service has helped answer these questions:

Our client was 51 years old and intended to retire at the age of 65. He had arranged his pension in the early 1990’s at a time when he was self-employed. He had latterly become employed and joined his employer’s pension scheme at which point he stopped paying into his own personal pension. Since he started paying into his pension he had divorced.

As part of our Pension Review Service we talked to our client about his attitude to risk, expected retirement age and personal situation as well as his expectations from his pensions.

We made contact with his pension provider in order to establish the facts surrounding the plan and identified a number of concerns such as:

  • The pension fund had grown to ~£200,000 but was wholly invested in one fund.
  • We had assessed our client to have a medium risk approach but in isolation the investment fund was suitable for higher risk investors.
  • The nominated beneficiary, who would receive the pension fund should he die before retirement, was his ex-wife.
  • The selected retirement age, i.e. the age the provider was expecting him to take his benefits, was 55 as opposed to his expected retirement age of 65.

We considered a range of options including re-aligning the funds to reflect the client’s attitude to risk and diversification through selection of multiple funds. We established that the provider only had a few dozen funds available and many were unsuitable or unattractive.

One of the options was to transfer to a new Pension Provider and invest in a wide range of funds through an Asset Allocation Model suited to their risk profile. The overall charges were marginally higher than was being paid but the client felt that these were worthwhile given that he would receive a range of additional benefits including:

  • Funds that are monitored on a regular basis and switched if necessary;
  • Diversification by investing in a range of funds;
  • A regular review strategy that would facilitate changes to his situation and requirements;
  • Alignment of the pension to reflect his intended retirement age and overall retirement strategy.

As part of the process of arranging the new pension the client was able to set new beneficiaries. These people would receive the pension fund should he die before retirement.

If you’re concerned about the performance of your pension fund or you just want to check that your investment is performing as best it can, then get in touch with us today.

The value of your investments can go down as well as up, so you could get back less that you invested

New ISA (NISA) Limits and options

Individual Savings Accounts (ISAs) enter a new phase from 1 July 2014. At present, ISA contributions for the 2014/15 tax year are capped at £11,880. The entire amount can be invested in a stocks & shares ISA, or up to £5,940 can be saved into a Cash ISA. However, from 1 July 2014, the ‘New ISA’ (NISA) limit will increase to £15,000 and you can invest as much as you like of this allowance in cash, stocks & shares or a combination of the two. Investors will also be able to transfer ISA savings from previous years freely between stocks & shares and cash.

Moreover, from 1 July, any interest on cash held within a stocks & shares NISA will be free of tax. This means that, from 1 July, you could have just one NISA, rather than separate NISAs for cash and stocks & shares. This simplicity might be attractive to some investors although, you should not assume you will receive the best rate of interest on the cash element, and it might be worth having a separate cash NISA if you want a competitive rate. You can also transfer your NISAs freely between providers – subject to any penalties that might be applied by your existing provider – but you can only have one cash NISA and one stocks & shares NISA in any single tax year.

Any ISA subscription made between 6 April and 30 June 2014 will be counted against the £15,000 NISA subscription and you will not be allowed to open up a new NISA for the current tax year from 1 July. Instead, you will have to top up the existing account. Check with your provider’s terms and conditions – particularly if you have already opened a fixed-rate cash ISA.

The range of investments that can be held within a NISA is also expanding – for example, investors will be able to hold corporate bonds with less than five years left to maturity. This expansion is likely to lead to an increase in new products from providers that, in turn, will provide greater choice for savers. One thing will not change, however – once it’s gone, it’s gone. At the end of each tax year, you lose any unused ISA allowance, so make sure you act in good time.

For more information or assistance contact  us on 0113 2825017 or email

BLM website:

BLM Partnership Ltd, 95 Aberford Road, Oulton, Leeds, LS26 8SL.



ISA’s are to become NISA’s

This years budget served up a few surprises. As part of the Chancellors drive to help savers, he announced a significant increase in the amount that can be paid into ISA’s and also reformed it into a ‘simpler’ savings product. Called ‘New ISA’ (NISA) all existing ISAs will become NISA’s!

The change will take place from the 1st July 2014 and from that date the overall annual subscription limit for these accounts will be increased to £15,000 for 2014/15.

For the first time, ISA savers will be able to subscribe this full amount to a cash NISA (currently only 50% of the overall ISA limit can be saved in cash). Investors are able to open one Cash NISA and one Stocks and Shares NISA each tax-year. However, once open, the Cash or Stocks and Shares NISA can be transferred between providers unlimited times.

Under the NISA, investors will also have new rights to transfer their investments from a stocks and shares to a cash account (currently only the opposite is possible). There will be consequential changes to the rules on the investments that can be held in a NISA, so that a wider range of securities (including certain retail bonds with less than five years before maturity) can be invested. In addition, Core Capital Deferred Shares issued by building societies will become eligible to be held in a NISA, Junior ISA or CTF.

Between the 6th April and 1st July 2014, the total amount that can be paid into a Cash ISA is £5,940 and the combined amount paid into Cash and Stocks and Shares ISAs must not exceed £11,880. From 1st July 2014, existing ISAs will automatically become NISAs, with a higher limit and more flexibility. Thereafter an investor can add further money to either their Cash or Stocks and Shares NISA, up to the new £15,000 limit. From the 1st July 2014, any money held in a Stocks and Shares NISA can be transferred to a Cash NISA.

Different transfer rules will apply depending when funds were paid into the Stocks and Shares account. If money is invested between April and July 2014, this sum must be transferred as a whole. Other amounts from previous years may be transferred as a whole or in parts, if the provider permits.

Child trust Fund / Junior ISA
The amount that can be subscribed to a child’s Junior ISA or CTF in 2014/15 will also be increased to £4,000.

Whilst this move is heralded to make saving into an ISA ‘simpler’, there are certain aspects which add complication. For example the fact that you can move money freely between Cash based savings to Stocks and Shares Investment and vice-versa.


We welcome these changes which are positive for savers and investors; the need for advice in terms of movement of money from one type of investment (deposit to equity based investment and vice-versa) makes the need for clear financial advice even more compelling.


Bank Base Rate – the highs and lows of 5 years of a record low

Bank Base Rate – the highs and lows of 5 years of a record low

The Bank of Englands Monetary Policy Committee has announced that the base rate will remain at its present level of 0.5%,  five years after the record low level was first introduced.
Depending on your own personal situation, this could be good news or bad news:

  • it is likely to be regarded as bad news for savers and those who don’t have a mortgage. This demographic of people have been hammered over the last 5 years and many have been forced out of a deposit based savings environment where their capital balance could not fall into one where they could lose some or all of their money in the hope of receiving a higher return overall.
  •  it will be regarded as good news for borrowers; especially those with variable rate mortgages who have no protection against rising rates. After 5 years these borrowers could be forgiven for thinking that rates will never go up and effectively tailoring their lives around a low interest rate environment.

Christopher Malkin, one of the principals and advisers at BLM,commented that whilst interest rates remained at these levels those dependent on income from their savings were being forced to make some difficult decisions about the way in which they structure their investments and that a  good proportion of people may be taking more risk than they would otherwise be prepared to accept in order to try and make ends meet. Investment risk comes in many forms but the current situation underlines the basic principle that an investment strategy should be based around a good risk assessment.

He also commented that the value of the money that people hold in Bank and Building Society savings accounts is being eroded through the insidious effects of inflation, which is generally higher than deposit account rates.

For those with a mix of a mortgage and savings, the situation is more likely to be neutral however, for those with larger mortgages or mortgages that are presently costing the maximum they can afford to pay each month, the latest ‘hold’ on rates is likely to be good news. Stephen Sale, principal and adviser at BLM, commented that borrowers should be careful not to count on interest rates remaining at these levels for much longer. Many economists are expecting rates to remain static through 2014 but begin to rise in 2015 with some predicting a rise from 0.5% to 1% through 2015 and then rising to 2% through 2016.

For those with savings such rises will be welcome but for borrowers who have very little extra in their budget to pay an increased cost, the situation may look more bleak and they should perhaps consider their options.

6th March 2014