Half a million open Help-to-Buy Isas

house Image copyright Thinkstock

A total of 555,000 people have opened Help-to-Buy Individual Savings Accounts (HTB Isas) since they launched in December, government figures show.

The accounts enable first-time buyers to save money free of tax and qualify for a government bonus at the same time.

If the proceeds are used to buy a home, the government adds 25% to the total.

The figures also show that 2,090 bonuses were paid under the scheme up until the end of May.

The average value of the bonuses was £421.

Savers used their money to buy 1,490 properties, with the highest interest coming from homebuyers in the North West and Yorkshire.

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How does a Help to Buy Isa work?

"For the time being, HTB Isa is a no-brainer for those saving toward their first home, even if ultimately their savings are used for a different purpose," said Danny Cox of investment provider Hargreaves Lansdown.

"However, from April 2017, the Lifetime Isa (Lisa) will become the savings scheme of choice."

The Lifetime Isa will allow savers to receive a more generous bonus, if they spend the money either on a home or a retirement income.