The amount in the accounts of those looking to purchase a property through the soon-to-be-scrapped scheme amounts to £4.86bn, according to a Freedom of Information request by Finder.com.
Help to Buy ISAs were introduced by the Conservative Government in 2015 to encourage savers onto the property ladder by offering a generous bonus of £3,000 once they’ve purchased a home.
The initiative was shelved in 2019 and had a maximum amount you can pay in each month of £200. But the Government would top that up yearly with a 25% bonus to bring up a total of £3,000.
If you’d have saved the maximum amount for the four years the scheme was open, you would have a bonus of £3,000 to add to your £12,000 savings pot – a total of £15,000 to put towards a deposit for a new home.
While the bonuses were generous from the Government, the value of the property purchased with the ISA had to be £250,000 (£450,000 in London) or lower, and in the nine years since its launch, house prices have skyrocketed by 42% to an average of £268,000.
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Despite this, the limit for what you can put the money towards has not increased.
As it stands, more than half (54%) of local authorities in December 2024 had average house prices above £250,000, while 82% of councils in London had average house prices over the £450,000 barrier.
This means savers are stuck with their savings pots and unable to find a home that meets the required price criteria.
Property transactions by first-time buyers using Help to Buy ISAs dropped to a record low in 2023 of 45,016. For the three months to June 2024, they accounted for just 10,977, according to Government data.
Help to Buy ISA ‘prisoners’ are also unable to shift their funds into a Lifetime ISA (LISA), a scheme launched in April 2017 for under-40s that came with a higher property price limit of £450,000 and an increased savings limit of £4,000. The deal also came with the same 25% Government bonus.
In January, an inquiry into whether the LISA should continue in 2025 began, but no plans for a Help to Buy ISA equivalent are in the pipeline.
Wait for LISA results
Matt Mckenna, personal finance expert at Finder.com, said: “It feels like the Help to Buy ISA has genuinely been forgotten about. We will see what comes out of the Government’s recent consultation on the Lifetime ISA, but the fact that the Help to Buy ISA wasn’t even mentioned among the 10 questions they asked says it all.
“It is getting harder than ever for potential homeowners to get on the housing ladder, so it’s shocking that over two million people are ISA prisoners, effectively trapped in a product that isn’t fit for purpose.”
Mckenna added: “Allowing them to transfer their hard-earned savings over to the Lifetime ISA in one go would be very simple to do and make a huge difference to people’s lives.
“This is what Finder is campaigning for – we are encouraging people to get in touch with their MPs using this letter template to bring about the simple change that is needed.”
