- Three in five first-time buyers without one would be more likely to save into a Help to Buy: ISA if they knew more about it
- Three quarters of first-time buyers call for Government to abolish the deadline for new applications and make it permanent
- Even amongst those who are aware of Help to Buy: ISAs, there is confusion of how the Government bonus structure works
The 30th November deadline for new applications for Help to Buy: ISAs is fast approaching and new research1 released today from specialist bank, Aldermore, shows almost two thirds (63%) of prospective first-time buyers are unaware of the cut-off date. When given more information about the deadline, three quarters (75%) of those surveyed thought it should be made into a permanent scheme.
Launched over three years ago, Help to Buy: ISAs offer first-time buyers the opportunity to save up to £200 a month with the Government topping up their contributions by 25%, up to a maximum of £3,000. However, Aldermore’s research shows that confusion is rife. Even amongst those who had heard of the Help to Buy: ISA, many are still unsure how it works. Over four fifths (83%) don’t know what the minimum Government bonus is, while 80% don’t know what the maximum is.
Despite the confusion, almost four fifths (78%) of first-time buyers think the introduction of a bespoke savings product to help them save towards their first property is a good idea.
Ewan Edwards, Head of Savings, Aldermore commented, “Buying that first property can seem like a pipedream for many people and the Help to Buy: ISA is an innovative product launched by the Government to get them one step closer. It’s worrying that a large proportion of prospective first-time buyers are still unsure of what it is, how it works or the fact that the clock is ticking to open one. They could literally be missing out on thousands of pounds worth of Government funding towards their first home.”
Lack of understanding, not appetite
Three in five (61%) of prospective first-time buyers who don’t currently save into a Help to Buy: ISA say they would be more likely to save into one if they understood it better. And encouragingly, after being given an explanation of the product and its benefits, over three quarters (78%) of prospective first-time buyers said they would use one to save for their first property.
It’s not only young people who are confused. Aldermore’s research shows that there is also a lack of understanding of how the Help to Buy: ISA works amongst parents.2 Almost nine in ten (89%) of parents of first-time buyers are unsure what the minimum Government bonus is, while a similar proportion (93%) are unsure what the maximum bonus is. When they were given an explanation, the vast majority (86%) said they would encourage their child to save into a Help to Buy: ISA.
Ewan Edwards adds, “Lack of understanding is a massive barrier but reassuringly, when explained exactly how the Help to Buy: ISA works, a high number of first time buyers would consider it, with the bonus incentive being the main part of its appeal.
“With only six months to go, people who are thinking about buying their first property in the next five or even ten years should consider opening a Help to Buy: ISA before the November deadline so they don’t lose out on the 25% Government bonus. Contributions can be made until November 2029, and the cut-off date to claim the bonus is 1st December 2030.”
1The figures are sourced from a nationally representative survey conducted by Opinium Research with a sample of 502 prospective first-time buyers in the UK between 26th April and 2nd May 2019.
2The figures are sourced from a nationally representative survey conducted by Opinium Research with a sample of 252 parents in the UK between 26th April and 28th April 2019.
For further information, journalists can contact:
Carla O’Shaughnessy, Aldermore
Phone: 020 3553 4214
Laura Cronin, Lansons / Laura Marshall, Lansons
Phone: 020 7294 3607 / 020 7294 3636
Email: firstname.lastname@example.org / email@example.com
Twitter: @AldermoreBank @AldermoreNews
Notes to Editors:
For further information about Aldermore, please review our Notes to Editors page.
Aldermore Bank PLC is an operating entity of Aldermore Group PLC.
Aldermore Bank PLC is regulated by the Prudential Regulation Authority and the Financial Conduct Authority and is registered under the Financial Services Compensation Scheme.