First time buyers have one month left to open a Help to Buy ISA
**Urgent one-month warning for first-time buyers, new Tesco Clubcard Plus analysis, M&S beauty advent calendar, beat broadband hikes and Nectar double-up offer. These are our Money Saving Expert Martin Lewis’ Tips of the Week.**
Remember, tips can change quickly, even while I’m on the programme. So always double-check the terms and conditions before spending. Plus, while I hope these tips will save you cash, don’t spend if you can’t afford it, don’t need it, or won’t use it.
An urgent one-month warning to anyone 16+ who’s never owned a home
The easiest, simplest form of help for first-time buyers to build a deposit closes to new applicants in just a month, on 30 November.
First-time buyers saving in Help to Buy ISAs get a 25% boost from the state, so each £1,000 saved becomes £1,250. So if you may one day want to buy a home, consider opening one now with £1+, as then the facility stays available until 2029. The Help to Buy ISA's replacement, the Lifetime ISA (LISA) also gives a 25% boost - but other terms differ, so choosing a winner is complex...
- To open a H2B you need to be age 16+, but LISAs can only be opened if you're 18-39 (so if you're near that 40th birthday, open one now).
- The LISA bonus is much bigger. You can save up to £4,000 per tax year in LISAs, but with H2B ISAs it's just up to £1,200 in month one, then up to £200/mth after that. So max both out for two years and you'd have £5,800 in H2B (so a £1,450 bonus), but £12,000 in a LISA (a £3,000 bonus).
- LISAs lets you buy a property up to £450,000. They can be used with any residential mortgage on any property. With a H2B, it's a max £250,000 (£450,000 in London).
- H2B bonus is triggered after just 3mths of max savings, but you must have had a LISA open for a year. So if you want to buy quickly, go for a H2B ISA.
- Only H2B lets you withdraw penalty-free. So they're a no-brainer, as there's no downside. Yet with LISAs, withdraw for anything other than a first home (or retirement when aged 60) and there's an effective 6.25% penalty.
- The top H2B ISA pay more than the top LISAs. Though if a LISA wins, if you've enough savings to max or near max it out, its far bigger bonus makes up for the lower interest.
So in summary, if you're 18-39, will definitely buy a qualifying home and won't buy within a year, go for a LISA for the bigger bonus. If you're older, need to buy quickly or aren't 100% sure you'll buy at all, a H2B ISA is safer.
If think you (or your kids) might use one but you’re not sure put £1 in now, possibly in both, just in case. At least if you have £1 in a H2B ISA by 30 November you won’t lose the opportunity - LISAs don't have an end date, but have the 'it must have been open a year to get the bonus' rule, so £1 in now gets that clock ticking. If both are open, you can decide later which is best.
Tesco to launch Clubcard Plus scheme next month – but is it any good?
Tesco’s launching a new Clubcard Plus subscription service on 8 November, which gives perks like discounted shopping for a monthly fee of £7.99.
The scheme gets you 10% off two shops of up to £200 each every month, as well as a separate 10% off Tesco’s non-grocery brands like its F&F fashion range. It also gives double data on Tesco Mobile phone contracts and the option to apply for a new Tesco Bank credit card with no foreign transaction fees from next year.
You’d also get the usual benefits of the Clubcard scheme, which won’t be changing – so you can still earn points on spending and boost them to triple their value.
For most people the big benefit is the 10% off two shops. If you spend £80+ over two shops every month in Tesco stores it is worth it, as your gain is the same or more than the fee – if you max it out you’ll be £32/mth up.
Tesco has learnt from Amazon Prime that when people pay for a subscription they’re more loyal, so bizarrely it will tend to get the benefit of the subscription fee and more sticky shoppers by doing this.
£250+ worth of beauty products in £40 M&S advent calendar: Last week it was Boots, now this eagerly awaited deal is available online and in stores from today (31 October). You’ll get items from brands like Aveda, L’Occitane, Eyeko and Ren which would cost over £250 if you bought them separately from the cheapest retailers – plus a voucher for 20% off M&S beauty to be used between 25 Dec online (26 Dec in stores) until 29 Feb 2020.
There’s a catch though – you’ll need to spend £25+ on M&S clothing, beauty and/or homeware to be eligible to buy the £40 calendar, so technically you’ll need to spend £65 to get it.
Beat Plusnet and Vodafone broadband hikes: 100,000s are set to be hit by broadband price increases in December. Plusnet’s hiking the cost of six broadband-only packages by £2/mth, while Vodafone’s putting prices up by £2.50/mth on two superfast broadband packages.
But if you’re affected by either provider’s hikes you CAN leave penalty-free within 30 days of being told about your price increase (check first to make sure you can get a cheaper deal elsewhere). And if you’re willing to stay, this is a great chance to haggle a better deal.
Nectar double-up offer now on: If you’ve a stash of Nectar points, now’s a good time to use them. Go online till 5 November, or use the Nectar app from 13-19 November, and you can get double the vouchers for your points – so 1,000 points will get you a £10 double up voucher instead of the usual £5. You can spend up to £100 in double-up vouchers in Sainsbury’s stores in any of the these 11 categories - cosmetics, electricals, entertainment, fragrance, gifts, homeware, seasonal goods, skincare, Taste the Difference wines, toys and Tu clothing.